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UK services sector continues to expand

More of the same, as services sector grows but manufacturing contracts, posing dilemma for the Bank of England.

22 February 2024

Today’s UK Services and Manufacturing PMI numbers for February came in broadly the same as the previous month’s reading, with services in expansion territory at 54.3 and manufacturing still in contraction at 47.1. Services, being the bulk of UK economic activity, are important leads for the overall trajectory and at this pace probably indicate that the UK recession of late last year is possibly already over.

How the Bank of England will react to this for rate cut hopes is not that obvious. Are they adopting continuing restrictive policy until inflation hits target, like the Federal Reserve, or is last year’s technical recession still on their minds? Judging by Governor Andrew Bailey’s comments to the Treasury Select Committee earlier this week, they are starting to point that they may move more quickly.

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The information in this document is given for information purposes only and does not qualify as investment advice. Opinions and assessments contained in this document may change and reflect the point of view of GAM in the current economic environment. No liability shall be accepted for the accuracy and completeness of the information. Past performance is not an indicator for the current or future development.

Charles Hepworth

Investment Director
My Insights

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