UK private sector returns to growth in January - IHS Markit / CIPS

January data from the IHS Markit / CIPS Flash UK Composite PMI highlighted a decisive change of direction for the private sector economy at the start of 2020. Business activity expanded for the first time in five months, driven by the sharpest increase in new work since September 2018.

The seasonally adjusted Flash UK Composite Output Index - which is based on approximately 85% of usual monthly replies - rose to 52.4 in January, from 49.3 in December. As a result, the headline index registered above the crucial 50.0 no-change mark for the first time since August 2019. The latest reading was the highest for almost one and-a-half years and signalled a moderate expansion of business activity across the UK private sector economy. There were widespread reports that reduced political uncertainty following the general election had a positive impact on business and consumer spending decisions at the start of the year. In addition, business optimism reaching its highest level since June 2015. Survey respondents often commented on hopes that an end to domestic political indecision will have a favourable impact on business investment and help to sustain a more favourable economic landscape.

Manufacturing PMI

At 49.8 in January, the seasonally adjusted Flash UK Manufacturing PMI picked up from 47.5 in December and was the highest since since April 2019. Economists had expected an increase to 48.9.

Services PMI

The seasonally adjusted Flash UK Services PMI posted 52.9 in January, up sharply from 50.0 in December and the highest reading since September 2018. Economists had expected an increase to 51.0.