After slowing output growth in the private sector, economists believe that interest rates will rise as wages, fuel and other energy costs increase again.

  • After a boost in output earlier this year, the pace of growth in output has fallen.
  • Positive news was good for the employment index, with figures rising and remaining stable.
  • It could lead to interest rates rising, according to economists in business.

After cost inflation in the private sector reached a record-breaking high, this country is now facing higher interest rates due to soaring fuel, wage and energy prices.

This was despite the fact that growth in private sectors was only marginally lower and companies reporting an increase in consumer demand.

Closely followed IHS Markit/CIPS Flash UK composite PMI report reached a reading of 56.7 for November. This is down from the 57.8 reported last month.

Scores over 50 indicate growth while scores below 50 are contraction.

These flash figures were compiled from responses received by most survey participants.

Chris Williamson of IHS Markit is the chief business economist. He said that IHS Markit’s survey results could lead to an interest rate rise next month, after the Bank of England surprised by its decision not to lower rates.

Output growth has slowed down after a positive boost earlier in the year after the pandemic

After a boost in output earlier this year, the pace of growth has fallen.

After a good rise from manufacturing and service businesses their growth has now slowed

Their growth is now slower after a strong rise in manufacturing and services businesses.

His comments were: “A combination of sustained, buoyant economic growth, continued job market gains and record levels of inflationary pressures gives the green light for interest rate increases in December.”

“Output growth for manufacturing and services was slightly slower than expected in November. But, this is heavily skewed toward the service sector because factories still struggled with falling exports and supply shortages.

Services industry in the UK drove growth during the period. It reported a 58.6 figure for November, amid the largest increase of new business since June 2018.

Even though sales volume is recovering, service sector firms said that margins are being squeezed by an increase in input costs as well as a slower rise in charges to clients.

The trends on the graphs painted a grim picture as lines plummeted after previous rallies

As lines fell after rallies past, the trends in graphs showed a dark picture.

The employment index showed positive news as figures rose and stayed relatively stable

As figures rose, the index remained relatively stable. This was positive news for the employment sector.

While the manufacturing sector witnessed growth increase, it was also comparably low with an average reading of 52.9 in the last month.

According to the report, a severe shortage of material and personnel had impeded growth and caused an increase in input prices.

CIPS group director Duncan Brock stated that the CIPS survey showed rising fuel costs and wages, which led to inflationary pressures at their highest point since 1998. 63% supply chain managers spent more on materials.

“Shortages in staff and production stops due to lack of supplies contributed to frustrations within the manufacturing sector. Some machines became silent.”