- Prior 51.3
- Manufacturing PMI 51.2 vs 50.4 expected
- Prior 50.2
- Composite PMI 52.1 vs 51.6 expected
- Prior 51.2
These are nice beats, but the commentary isn't as good. The agency cites lacklustre growth, worryingly widespread job losses and renewed upturn in selling price inflation across both goods and services.
It keeps the BoE on track to cut rates on Thursday, but the central bank will likely sound more cautious on the next moves, remaining highly data-dependent. There's a risk that they overease, so the market might scale back a bit the dovish expectations.
Key Findings:
- Output growth accelerates in December, led by sharpest rise in new business for 14 months
Comment:
Chris Williamson, Chief Business Economist at S&P Global Market Intelligence:
“December’s flash PMI surveys brought welcome news on faster economic growth at the end of the year, with businesses buoyed in part by the post-Budget lifting of uncertainty. The PMI is consistent with GDP growth accelerating to 0.2% in December, albeit with a more modest 0.1% gain signalled for the fourth quarter as a whole.
"It’s a big relief that business confidence has not slumped in a repeat of last year’s post-Budget gloom. Instead, companies have ended the year on a slightly more optimistic note amid signs of improving demand now that some of the uncertainty created by the Budget has cleared. New orders are in fact growing at the fastest rate for over a year.
"However, the overall pace of output and demand growth remains lacklustre, and the expansion is still very dependent on technology and financial services activity, with many other parts of the economy struggling to grow or in decline.
"Job losses are also again worryingly widespread, and it remains to be seen whether the uptick in orders during December will persuade more companies to start hiring again, especially as rising staff costs continue to be reported as one of the key concerns of businesses. These higher cost pressures were in turn cited as the key cause of a renewed upturn in selling price inflation across both goods and services.
"The sluggish growth and worrying jobs data from the flash PMI data therefore suggest that the odds remain in favour of a further cut to interest rates at the December MPC meeting, but that the path to further rate cuts in 2026 remains very data dependent, as policymakers await confirmation that price pressures are going to soften materially as the year proceeds.”
