Key Findings:
Comment:
Commenting on the flash PMI data, Chris Williamson,
Chief Business Economist at S&P Global Market
Intelligence said:
“The first survey on the health of the economy after the
Budget makes for gloomy reading. Businesses have
reported falling output for the first time in just over a
year while employment has now been cut for two
consecutive months. Although only marginal, the
downturns in output and hiring represent marked
contrasts to the robust growth rates seen back in the
summer and are accompanied by deepening concern
about prospects for the year ahead.
Business optimism has slumped sharply since the
General Election, dropping further in November to hit the
lowest since late 2022. Companies are giving a clear
‘thumbs down’ to the policies announced in the Budget,
especially the planned increase in employers’ National
Insurance contributions.
The November PMI is indicative of the economy slipping
into a modest decline, with GDP dropping at a 0.1%
quarterly rate, but the loss of confidence hints at worse
to come – including further job losses –unless sentiment
revives.
Encouragingly, inflation pressures have moderated
further, with selling prices rising at the slowest rate seen
this side of the pandemic. However, still-elevated rates
of wage-related price and cost growth are being
recorded in the service sector, potentially limiting scope
for rate cuts among the more hawkish policymakers.”
This article was written by Giuseppe Dellamotta at www.forexlive.com.
