Closing summary
European stock markets are a sea of red, amid rising tensions on the border between Ukraine and Russia. They started the day trading higher on hopes of a France-brokered summit between the Russian and US presidents, but a few hours later a spokesman for Vladimir Putin said there were no immediate plans for such a meeting.
The UK’s FTSE 100 index has slipped 0.3% to 7,490 while Germany’s Dax and France’s CAC have lost more than 2%.
UK and Dutch gas prices are rising again, reversing earlier declines, amid disruption from the storms (high winds have stoped liquefied natural gas cargoes from docking) and fears that Russian aggression in Ukraine will lead to further supply disruption. The British gas contract for immediate delivery gained nearly 4% to 180p per therm, while the Dutch contract for March increased by 3.5% to €74.70 per megawatt hour.
Oil prices have see-sawed. Brent crude is now up 1.25% at $94.71 a barrel while US light crude has gained 1% to $92 a barrel.
Here are our main stories:
Thank you for reading. We’ll be back tomorrow. Stay safe – JK
Updated
The British firm Synairgen has suffered a massive blow: its main product, an inhaled drug that was tested in hospitalised patients hospitalised with Covid-19, did not show any meaningful change compared to a placebo in late-stage trials. Shares in the company, a University of Southampton spinout, plummeted 84% to 26p today.
Intermediate trials had been promising and the chief executive, Richard Marsden, said:
While we are disappointed by the overall outcome, SNG001 has been administered to hospitalised patients on top of standard of care which changed substantially between our Phase 2 and Phase 3 trials. This improvement in patient care may have compromised the potential of SNG001 to show a clinical benefit in respect of the endpoints for this study, which were not met.
Despite this we have observed an encouraging trend in prevention of progression to severe disease and death, which we strongly believe merits further investigation in a platform trial. We are now analysing the full dataset to better understand all the findings.
The drug can be administered by patients themselves through a hand-held, battery-operated nebuliser.
Storm Eunice crushed hopes for a good half-term week for retailers on Britain’s highstreets and shopping malls. The latest figures from retail experts Springboard show footfall dropped by 3.8% across the UK last week, with a 32% drop on Friday, when Storm Eunice battered the country, and a further 12.6% decline on Saturday.
The north and southwest, where the storm hit hardest, footfall suffered the most.
The week had started well, with an uplift of 18% last Monday. Trips out led to noticeable increases in footfall in central London, regional cities and historic towns across the UK between Monday and Thursday, averaging 16.2%, 10.8% and 10.7% respectively.
Diane Wehrle, insights director at Springboard, said:
Unsurprisingly, footfall across UK retail destinations last week was majorly affected by the severe storms, which negated the positive impact of the start of the February school half-term break.
Storm Eunice landed on Friday and led to significant declines in footfall on both Friday and Saturday. Prior to that Storm Dudley had hit UK shores on Wednesday, but in overall terms this had a more minor impact on footfall. Inevitably high streets felt the greatest effects of the weather, with a slightly stronger result in shopping centres - the vast majority of which offer shelter from the elements - and in retail parks which are easy to access by car.
Bundesbank warns of German recession; producer prices soar 25%
Despite the February rebound in the PMI survey for Germany, the Bundesbank has warned that the Omicron wave of Covid-19 infections – which means many people are unable to go to work – will cause a sharp decline in the country’s economic output, or GDP, in the January to March quarter – the second quarter of decline. This would put the country back into recession, its second since the pandemic began.
However the slump is likely to be short-lived: the Bundesbank expects a strong bounceback in the April to June quarter.
It wrote in its monthly report:
German economic output is likely to decline again markedly in the first quarter of 2022. This is due to the resurgence of the pandemic caused by the Omicron variant.
In contrast to previous waves of the pandemic, the services sector is unlikely to be the only one in which activity is being adversely affected by containment measures and social and physical distancing requirements. In fact, working hours lost due to the pandemic could also be having a distinctly dampening effect on economic output – and in other sectors, too.
Nevertheless, positive effects are expected from the industrial sector. Here there are signs of a further easing of supply bottlenecks, and demand for industrial products remains high. In light of very robust demand, GDP is likely to rebound strongly in the second quarter, provided the pandemic subsides and the supply bottlenecks continue to ease.
Earlier today, official data showed German producer prices in January rose at their fastest rate since records began in 1949. They jumped 25% from the same month last year, due to spiralling energy costs, up 66.7%.
Within this, gas went up by a whopping 119% from January 2021. Electricity prices rose by 66.7% and prices of mineral oil products by 32.9%.
Stripping out energy, producer prices increased 12%, still a hefty rise.
Returning to the storms… not only have pilots had a tough time in recent days, but baggage handlers are also struggling to unload luggage from planes, the BBC reports.
British Airways said the stormy weather had made opening the luggage hold of aircraft tricky, and that machinery such as scissor lifts, needed to to offload bags, could not be operated in high winds. This has led to delays in passengers getting their bags after landing in the UK. BA apologised for “letting people down”.
The high winds mean that many aircraft circle above the airport after failing to land before they try again, causing delays to other planes as well.
Storm Eunice forced flight cancellations on Friday while Storm Franklin, raging now, has brought more travel chaos to Britain, including train cancellations.
Updated
Here is the latest revelation from the Credit Suisse leak, which has revealed the secret owners of £80bn held in the Swiss bank.
Revealed: king of Jordan used Swiss accounts to hoard massive wealth, by Martin Chulov, our Middle East correspondent.
In 2011, as popular revolts reverberated around the Middle East, a monarch in the midst of it all made some banking decisions. Sometime that year, as neighbouring Egypt and Syria withered in the face of momentous civil protests, King Abdullah II of Jordan opened two new accounts with Credit Suisse, the Swiss bank that had discreetly served the region’s well-heeled for decades.
Abdullah, one of the world’s longest-serving current monarchs, had chosen a banker that shared his approach to secrecy, particularly surrounding his personal wealth. Over the next five years, the king was the beneficial owner of at least six accounts with Credit Suisse, while his wife, Queen Rania, had another.
According to a massive trove of data leaked from the bank that names both royals as account holders, one account would later be worth a remarkable 230m Swiss francs (£180m).
And here’s an explainer: What is the Suisse secrets leak and why are we publishing it?
As Storm Franklin sweeps across Britain – the third storm to batter the country in a week – wind power drove more than two-fifths of all electricity generated over the past day.
According to National Grid, wind power accounted for 41.4% of electricity generation in the last 24 hours, and renewable energy as a whole (including solar and hydroelectric) accounted for 45% of the mix. At the moment, wind is powering 34.8% of all electricity generated.
It’s not quite enough to break the record set over Christmas. On Boxing Day, wind farms supplied more than half of the UK’s electricity, when Storm Bella brought powerful winds to many parts of the UK.
European’s main stock markets have all turned negative apart from the FTSE 100 index in London, which is flat at 7,515.
- Germany’s Dax down 0.1% at 15,026
- France’s CAC down 0.57% at 6,890
- Italy’s FTSE MiB down 0.8% at 26,285
JPMorgan economist Allan Monks has also looked at the UK PMI data:
The employment reading also moved up by just under a point to 57.5, an indication that the recent slowing in job growth in the official data is temporary. In a signal of expectations for a broader and lasting improvement from the latest Covid wave, the year ahead future expectations reading rose to its highest since last August.
The input price reading rose, while output prices fell modestly, owing to the manufacturing sector. In a sign of a further improvement in supply chains, the delivery times reading indicated another shortening in wait times and has now recovered half of its pandemic-related deterioration.
While growth is not the Bank of England’s main focus at the moment, the surge in the PMI in February indicates strong momentum in growth ahead of a set of headwinds that are due to intensify from April. To the extent this momentum limits damage to the labour market, we believe that it will further encourage the BoE to continue normalizing rates in the coming months.
Gabriella Dickens, senior UK economist at Pantheon Macroeconomics, said she was revising up her forecast for UK GDP growth in the first quarter to 0.6%, and added that the Bank of England will “almost certainly” raise interest rates again at next month’s meeting.
The sharp rise in the composite PMI in February, to its highest level since June, suggests that the U.K. economy is rebounding from Omicron at a fair clip. The PMI was well above its average level in the second half of 2021—56.3—when GDP rose by 1.0% in both Q3 and Q4. The rise in the composite PMI largely reflected a jump in the services PMI to an eight-month high. In addition, the manufacturing sector—which was largely unscathed by Omicron—benefited from a further easing of supply chain disruptions; the suppliers’ delivery times index rose to a 15-month high of 31.9, from 30.4.
February’s PMIs chime with other timely indicators that suggest activity has picked up in recent weeks. For instance, transport usage data showed that rail passenger numbers in the seven days to February 14 rose to 63% of their level in the same days of 2019, up from 60% a week earlier.
All told, then, we are now revising up our forecast for quarter-on-quarter GDP growth in the first quarter to 0.6%, from 0.3% previously.
Alas, a large majority of companies surveyed by Markit still are hiking prices; the output price index of the manufacturing sector fell only to 69.1, from 70.9 in January, while the prices charged balance of the services survey fell merely to 63.2, from 63.9. The combination of reviving economic activity and widespread price increases suggests that the MPC almost certainly will raise Bank Rate to 0.75% at next month’s meeting.
Chris Williamson, chief business economist at Markit, said another interest rate hike from the Bank of England is on the cards, as soon as March.
With the PMI’s gauge of output growth accelerating markedly in February and cost pressures intensifying to the second-highest on record, the odds of an increasingly aggressive policy tightening have shortened, with a third back-to-back rate rise looking increasingly inevitable in March.
However, the indications of a growing plight for manufacturers will need to be watched, and the service sector’s new business index will need to be monitored for signs of the demand revival losing steam. Given the rising cost of living, higher energy prices and increased uncertainty caused by the escalating crisis in Ukraine, downside risks to the demand outlook have risen.
#BoE increasingly likely to hike interest rates again as UK economic growth surges in February as COVID-19 containment measures are withdrawn. Flash #PMI signals sharpest rise in business activity since last Junehttps://t.co/REmxHNoVMU pic.twitter.com/dCm1WDdqlm
— Chris Williamson (@WilliamsonChris) February 21, 2022
Julian Jessop, an independent economist, tweets:
💥 Flash UK composite output #PMI index jumped to 60.2 in February (8-month high) as economy rebounded from #Omicron scare 💥
— Julian Jessop (@julianHjessop) February 21, 2022
ps. eurozone index also surged, to 55.8, but still below the UK (for 5 months running)... pic.twitter.com/tTxxDYw6mU
Looser pandemic restrictions prompted a stronger expansion in the UK with the #PMI at a 8-month high of 60.2. Output growth in the service economy exceeded that seen in the manufacturing sector, while supply chain issues showed signs of easing. Read more: https://t.co/I4tg3UtgmT pic.twitter.com/SKMrajGbGa
— IHS Markit PMI™ (@IHSMarkitPMI) February 21, 2022
Updated
UK business activity strongest since June, led by travel, leisure and entertainment
The UK economy bounced back in February, with business activity the strongest since last June, led by a recovery in consumer spending on travel, leisure and entertainment, the latest snapshot from IHS Markit shows. It said services firms benefited from a loosening of pandemic measures.
Its composite PMI index, which comprises manufacturing and services activity, jumped to 60.2 from 54.2 in January, marking an eight-month high.
The closely watched survey also showed high inflation persisted in February, as higher wages, energy bills and raw material costs all contributed to firms’ rising operating expenses. Markit said:
The overall rate of input cost inflation was the steepest since last November and the second-highest since the index began in January 1998. This resulted in another sharp increase in average prices charged by private sector firms, although the latest rise was softer than at the start of the year.
- Flash UK Composite Output Index February: 60.2, 8-month high (January final: 54.2)
- Flash UK Services Business Activity Index February: 60.8, 8-month high (January final: 54.1)
- Flash UK Manufacturing Output Index February: 56.7, 7-month high (January final: 54.5) Flash UK Manufacturing PMI February: 57.3, unchanged (January final: 57.3)
Updated
UK takeover spree continues with move on Clipper and higher bid for Menzies
The UK takeover spree continues with a move on Clipper Logistics, a Leeds-based warehousing company, and a higher bid for the Scottish aviation services company John Menzies from its Kuwaiti suitor.
Russ Mould, investment director at the investment firm AJ Bell, said:
The fight for UK assets by foreign companies continues apace with two targets in the services sector looking as if they will be the next ones gobbled up.
Clipper Logistics is in the sights of US firm GXO and Kuwait group NAS has just increased its offer again for aviation services group John Menzies. Both takeovers may sense strategically as they would complement the predators’ existing expertise and increase their scale in important markets.
The UK stock market may have a reputation being full of old economy companies and generally lacking the supercharged levels of growth seen in US tech space. However, what’s underappreciated is the plethora of small and medium-sized business which have carved out a niche and become important players.
Clipper, a warehousing company that counts John Lewis, Marks & Spencer, Morrisons and Asda among its customers, has agreed a possible takeover deal worth up to £940m with a New York rival, in the latest sign of the boom in online delivery, reports my colleague Jasper Jolly.
The board of Clipper unanimously recommended the possible takeover offer by New York-listed GXO Logistics of 690p a share plus shares in the Connecticut-based company worth up to 230p for each Clipper share.
Clipper’s shares jumped by 14% on Monday morning to 887p, near their record high of 910p.
Updated
European stock markets are still trading higher, with the exception of Italy, which is down 0.46%, although the UK’s FTSE 100 index has given up some of its gains. It is now 30 points higher at 7,544, a 0.4% gain, while Germany’s Dax is 0.27% ahead and France’s CAC is flat.
The Russian rouble is now trading at 77.13 against the dollar, up 0.2%, after a 1% gain earlier.
Moscow has dampened expectations for a summit between Vladimir Putin and Joe Biden.
Putin’s spokesman Dmitri Peskov said it’s “premature” to talk about specific plans for a summit between the Russian president and his American counterpart.
Peskov said Putin and Biden could meet if they consider it necessary, but emphasised that “it’s premature to talk about specific plans for a summit” and no concrete plans were in place.
You can read more on our Ukraine crisis live blog here:
Chris Williamson, chief business economist at IHS Markit said:
The eurozone economy regained momentum in February as an easing of virus-fighting restrictions led to renewed demand for many consumer services, such as travel, tourism and recreation, and helped alleviate supply bottlenecks. Business optimism in the outlook has likewise improved as companies look to the further reopening of the economy, encouraging increased hiring.
However, although easing, supply constraints remain widespread and continue to cause rising backlogs of work. As such, demand has again outstripped supply, handing pricing power to producers and service providers. At the same time, soaring energy costs and rising wages have added to inflationary pressures, resulting in the largest rise in selling prices yet recorded in a quarter of a century of survey data history.
The Eurozone #PMI recovered to a 5-month high in February (55.8; Jan: 52.3), but persistent cost pressures from rising wages and energy bills led to the strongest markup of goods and services charges on record. Read our full analysis here: https://t.co/pF3S4dzU68 pic.twitter.com/Yn5VJf4j8g
— IHS Markit PMI™ (@IHSMarkitPMI) February 21, 2022
Prices rise at record rate as eurozone growth rebounds
Economic growth picked up sharply this month across the eurozone, as Covid-19 restrictions were eased, according to the flash PMI survey from IHS Markit, which captures activity in the currency bloc’s private sector.
Future expectations, new orders and jobs growth also improved. Growth picked up especially in the service sector, though manufacturers also reported better production gains as a result of rising demand and fewer supply bottlenecks.
However, while an easing of supply delays helped to reduce raw material input cost inflation, persistent cost pressures caused by rising wages and energy bills led to the sharpest rise in average prices charged for goods and services in the survey’s history. Price rises in the service sector hit a record high while those in manufacturing rose at a near-record rate.
By country, the biggest bounceback was in France, where growth reached the highest since last June, though growth in Germany also picked up to the fastest since last August.
- Flash Eurozone PMI Composite Output Index at 55.8 (52.3 in January). 5-month high
- Flash Eurozone Services PMI Activity Index at 55.8 (51.1 in January). 3-month high
- Flash Eurozone Manufacturing PMI Output Index at 55.6 (55.4 in January). 5-month high
- Flash Eurozone Manufacturing PMI at 58.4 (58.7 in January). 2-month low
Updated
Teis Knuthsen, chief investment officer of financial investments at Danish investment firm Kirk Kapital, has tweeted:
Service-sector activity rose in February in both France and Germany, and PMI levels are higher than pre-covid. This is key to European growth this year. pic.twitter.com/eu0Zd3B0NJ
— Teis Knuthsen (@TeisKnuthsen) February 21, 2022
German economy grows at fastest rate in 6 months
The German economy has grown at the fastest rate in six months, despite a fresh wave of Covid-19 infections because of the spread of the Omicron variant, according to the latest business sector snapshot from IHS Markit.
- Flash Germany PMI Composite Output Index at 56.2 (Jan: 53.8). 6-month high
- Flash Germany Services PMI Activity Index at 56.6 (Jan: 52.2). 6-month high
- Flash Germany Manufacturing Output Index at 55.4 (Jan: 57.0). 2-month low
- Flash Germany Manufacturing PMI at 58.5 (Jan: 59.8). 2-month low
Phil Smith, economics associate director, at Markit said:
The German economy continued to regain momentum in February following December’s brief stagnation in output growth. Overall activity rose the most since last August, driven this time by the services sector as manufacturing production increased more slowly than in January, when it had provided the main impetus.
Although goods production rose at a softer pace, data on new orders showed the fastest rise in six months. Moreover, supply chain pressures appeared to ease further as average lead times lengthened to the least extent since November 2020.
Inflationary pressures remained strong, however. Overall input prices rose at a similar rate as at the turn of the year, despite the slowest rate of inflation in manufacturing for a year. Meanwhile, prices charged for goods and services increased at the second-fastest rate on record.
🇫🇷 French companies saw a rebound in activity growth in February, as the #PMI picked up to an 8-month high of 57.4 (Jan: 52.7). Nevertheless, ongoing supply chain problems led to the quickest increase in backlogs since April 2011. Read more: https://t.co/N0U2qGr744 pic.twitter.com/WhC0qw7EVJ
— IHS Markit PMI™ (@IHSMarkitPMI) February 21, 2022
French business activity strongest since June
The first of the flash PMIs is out – for France. It shows that business activity in February was the strongest since June.
- Flash France Composite Output Index at 57.4 in February (52.7 in January), 8-month high.
- Flash France Services Activity Index at 57.9 in February (53.1 in January), 49-month high.
- Flash France Manufacturing Output Index at 55.0 in February (50.9 in January), 7-month high.
- Flash France Manufacturing PMI at 57.6 in February (55.5 in January), 7-month high
Joe Hayes, senior economist at IHS Markit, which compiled the survey, said:
The slump in January proved to be short-lived as business activity growth accelerated sharply in February to its strongest since last June. Now that the trajectory of Covid-19 in France is on the downturn, this should continue to facilitate greater activity levels across both sectors. Indeed, anecdotal evidence from our survey panel suggests that business confidence is improving and supporting demand conditions.
However, the economic themes for 2022 will be focused on supply chains and inflation, which seem a long way off normalising based on the latest PMI survey. Supplier delivery times lengthened sharply once again during February, while input cost inflation remains stubbornly elevated. Sources of inflation are broad – our panel members reported rising prices for a multitude of inputs, and these are now being compounded by rising utility costs and wages.
Updated
Shares in AstraZeneca are up 1.5%, after the Anglo-Swedish drugmaker released positive results for its Enhertu cancer drug.
Britain’s biggest pharmaceutical firm, which is working on the medicine with Japan’s Daiichi Sankyo, said that it had been shown to prolong survival and slow the progression of metastatic breast cancer in patients with low levels of a protein called HER2.
The improvement is “clinically meaningful” when compared with standard chemotherapy, it said, adding that detailed trial results would be presented at an upcoming medical conference.
Susan Galbraith, executive vice president of oncology research & development at AstraZeneca, said:
Today’s historic news from DESTINY-Breast04 could reshape how breast cancer is classified and treated. A HER2-directed therapy has never-before shown a benefit in patients with HER2-low metastatic breast cancer.
These results for Enhertu are a huge step forward and could potentially expand our ability to target the full spectrum of HER2 expression, validating the need to change the way we categorise and treat breast cancer.
Updated
In London, the FTSE 100 steelmaker Evraz, which is incorporated in London but has significant operations in Russia, is the top riser on the index, up 5.4%. The company is 29% owned by Roman Abramovich, the Russian owner of Chelsea football club.
British Airways owner IAG (International Consolidated Airlines Group) is the second-biggest gainer, up more than 4%, as remaining domestic Covid-19 restrictions are ditched in the UK.
And we’re off – European shares have opened higher.
- UK’s FTSE 100 up 34 points, or 0.46%, at 7,549
- France’s CAC up 0.8%
- Italy’s FTSE MiB up 0.56%
- Spain’s Ibex up 0.7%
On the markets, nickel prices have hit their highest level in more than a decade, because of low stock levels, rising demand from electric car battery makers, and the Ukraine crisis.
Three-month nickel on the London Metal Exchange rose as high as $24,545 a tonne, the highest since August 2011.
Analysts at ANZ , Australia’s second-biggest bank, said:
Strong sales in electric vehicles are favouring demand for battery materials, including nickel.
They added that the Ukraine-Russia tensions and the resulting supply risk were adding to spread volatility.
A massive leak from one of the world’s biggest private banks, Credit Suisse, has exposed the hidden wealth of clients involved in torture, drug trafficking, money laundering, corruption and other serious crimes.
Details of accounts linked to 30,000 Credit Suisse clients all over the world are contained in the leak, which unmasks the beneficiaries of more than 100bn Swiss francs (£80bn)* held in one of Switzerland’s best-known financial institutions.
The leak points to widespread failures of due diligence by Credit Suisse, despite repeated pledges over decades to weed out dubious clients and illicit funds. The Guardian is part of a consortium of media outlets given exclusive access to the data.
The investigation reveals how Credit Suisse repeatedly either opened or maintained bank accounts for a panoramic array of high-risk clients across the world.
They include a human trafficker in the Philippines, a Hong Kong stock exchange boss jailed for bribery, a billionaire who ordered the murder of his Lebanese pop star girlfriend and executives who looted Venezuela’s state oil company, as well as corrupt politicians from Egypt to Ukraine.
The huge trove of banking data was leaked by an anonymous whistleblower to the German newspaper Süddeutsche Zeitung. “I believe that Swiss banking secrecy laws are immoral,” the whistleblower source said in a statement. “The pretext of protecting financial privacy is merely a fig leaf covering the shameful role of Swiss banks as collaborators of tax evaders.”
Credit Suisse said that Switzerland’s strict banking secrecy laws prevented it from commenting on claims relating to individual clients.
“Credit Suisse strongly rejects the allegations and inferences about the bank’s purported business practices,” the bank said in a statement, arguing that the matters uncovered by reporters are based on “selective information taken out of context, resulting in tendentious interpretations of the bank’s business conduct.”
Updated
Introduction: Rouble rises, markets remain on edge
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
The week has started on a calmer note with news that US president Joe Biden and his Russian counterpart Vladimir Putin have agreed to meet to discuss the Ukrainian crisis.
The French president, Emmanuel Macron, has invited Putin and Biden to attend a summit aimed at de-escalating the Ukraine crisis, and the leaders have agreed in principle, Macron’s office has announced, amid further US warnings that war is imminent.
The Russian rouble fell to a one-week low but has since recovered to trade up 1% against the dollar. It is now at 76.5 after touching 77.69 in early trade.
While tensions on the Ukraine-Russia border ramped up over the weekend, European markets are expected to rise slightly at the open. US markets are off for President’s Day.
Brent crude, the global benchmark for Russia’s main export (oil), is down a fraction at $93.45 a barrel. Gold – seen as a safe haven investment in times of trouble – has eased 0.5% to $1,888.54 an ounce after hitting an eight-month high of $1,891.33 an ounce.
However, markets remain on edge, and Asian stocks are mostly down today, with Japan’s Nikkei losing 0.78% and Hong Kong’s Hang Seng down 0.83%.
Last week, the UK’s FTSE 100 index had its worst week since late November, when the discovery of the Omicron Covid-19 variant rocked markets. The blue-chip index lost 1.9% after a big tumble last Monday.
In Japan, a key parliamentary committee has approved the government’s record 107.6 trillion yen (£690,000) spending plan for the next fiscal year, paving the way for the budget’s full passage through the legislature next month.
The highlight on the economic front are flash estimates for closely-watched business surveys from Markit for February, released this morning for the eurozone and the UK.
Michael Hewson, chief market analyst at CMC Markets UK, has looked at this.
The outlook for the French and German economy continues to look uncertain, although after a weak December the German economy did see a modest bounce back in January.
In the UK, December saw a sharp fall in services sector activity, to 53.6 from 58.5 in November, a move that saw a slight recovery in January, despite the Plan B restrictions which were brought in by the UK government half way through the month due to concerns about the Omicron variant.
The restrictions on the hospitality sector clearly hit pubs and restaurants, as well as some retail outlets, but we still saw a recovery to 54.1. With the gradual lifting of restrictions midway through January we could see a further rebound to 55.5 although it is likely to be tempered by caution over the rise in the cost of living.
Manufacturing activity in the meantime was steady, slipping modestly to 57.3, however selling price inflation has remained at record levels, a trend that looks set to continue. On the bright side new orders and employment also rose, with the hope that this will continue into the first quarter.
The Agenda
- 8.15am GMT: France Markit manufacturing, services and composite PMIs flash for February
- 8.30am GMT: Germany Markit flash PMIs for February
- 9am GMT: Eurozone Markit flash PMIs for February
- 9.30am GMT: UK Markit flash PMIs for February (forecast composite: 55)
- 3.15pm Treasury Select Committee hearing on the future of financial services
Updated
