Britain’s economy picked up pace this month despite rising prices and concerns over Covid cases
Britain’s economy has picked up pace this month despite rising prices and concerns over Covid cases.
A closely watched health check on the UK showed the private sector growing at its fastest rate for three months.
Research group IHS Markit said its index of activity in the UK – where scores above 50 show growth – rose from 54.9 in September to 56.8 in October.
Best foot forward: A closely watched health check on the UK showed the private sector growing at its fastest rate for three months
By contrast, companies in the eurozone are suffering their worst month since April, clocking up a score of 54.3.
The pick-up in activity in Britain will be a welcome boost for Chancellor Rishi Sunak ahead of next week’s Budget.
After a strong recovery earlier in the year, turbocharged by the successful Covid vaccine rollout and the lifting of lockdown restrictions, the UK economy has slowed in recent months.
Business has been hit by a shortage of materials and staff, while higher energy bills fuelled fears that Britain is heading for a painful bout of inflation. Bank of England chief economist Huw Pill warned inflation could top 5 per cent in the coming months – and said interest rates could rise as soon as November 4 in a battle to keep a lid on rising prices.
Official figures yesterday showed retail sales fell 0.2 per cent in September – the fifth consecutive monthly decline. That is the longest losing streak since records began in 1996.
IHS Markit said the recovery in October was led by the services sector. But factory output slowed as manufacturers were hit by ‘severe shortages of staff and materials’.
Chris Williamson, chief business economist at IHS Markit, said: ‘The economy picked up speed again in October, but the expansion is looking increasingly dependent on the service sector, which in turn looks prone to a slowdown amid the recent rise in Covid-19 cases. Growth is also being accompanied by an unprecedented rise in inflationary pressures, which will feed through into higher consumer prices in coming months.’