Prices remain a concern, but UK firms are continuing to rebound according to PMI

This month, British firms continued their recovery from the recession; but, a poll released on Thursday suggested that the Bank of England's wait-and-see policy on interest rates may be strengthened by persistent pricing pressures.

From 53.0 in February to 52.9 in March, the S&P Global Composite Purchasing Managers' Index (PMI) barely changed.

An economist survey conducted by Reuters indicated a reading of 53.1. Even with the minor decline, the index rose for a sixth month over the growth threshold of 50, indicating that Britain is expected to emerge from the mild recession it entered in the latter part of last year.

Ahead of the BoE's rate decision, policymakers had access to the composite PMI, which did not indicate any additional quick easing of inflation pressure.

Its measure of selling prices reached its highest point since July 2023, while its gauge of input prices somewhat fell down from the six-month peak reached in February.

Consumer price inflation dropped to 3.4% in February from 4.0% in January, according to official statistics released on Wednesday. This is the lowest rate since September 2021. Services inflation is still persistently high even if it is declining.

The services sector PMI dropped to 53.4 in March from 53.8 in February, a three-month low that defied forecasts for a result that remained constant. Both its new orders and employment metrics declined, with the latter hitting its lowest point since November.

In March, the manufacturing sector just avoided a 20-month decline. For the first time in almost a year, output turned positive as the manufacturing PMI increased from 47.5 to 49.9, which is slightly below the 50 no-change line.

(Sources: investing.com, reuters.com)