Britain’s economy has picked up pace this month despite rising prices and concerns over Covid cases.
A closely-watched health check in the UK showed that the private sector had grown at its fastest rate in 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
Companies in the eurozone, however, are experiencing their worst month since April with a score of 54.3
Chancellor Rishi Unak will be pleased to see the UK’s activity pick up ahead of next week’s Budget.
The UK economy has seen a slowdown in recent months, despite a strong recovery earlier that year, which was fuelled by the Covid vaccine rollout, and the lifting restrictions.
A shortage of staff and materials has impacted business, while rising energy costs have raised concerns that Britain may be facing a prolonged 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. This is the longest losing streak ever since records began in 1996.
According to IHS Markit, October’s recovery was led by services. Factory output was affected by’severe staff shortages and material’.
Chris Williamson is chief business economist at IHS Markit. He stated: “The economy picked up again in October, however, the expansion looks increasingly dependent on service sector, which in turn seems prone to slowdown amid recent rise in Covid-19 case. Inflationary pressures are unprecedentedly high, which is causing growth to be accompanied by higher consumer prices in the coming months.