Following the general election business confidence has rebounded as there has been a stronger activity in the UK’s private sector this month.
The S&P Global flash US purchasing managers’ index (PMI) showed a reading of 52.7 in July compared to 52.3 on June, economists had predicted a reading of 52.5.
The figures are based on business activity in the services and manufacturing industries.
Chief business economist Chris Williamson, at S&P Global Market Intelligence, said this “first post-election business survey paints a welcoming picture for the new Government.”
Williamson said British companies have “gained optimism about the future, reporting a renewed surge in demand and taking on staff in greater numbers.”
“Prices have meanwhile risen at their lowest rate for three and a half years, further raising the prospect of a summer rate cut,” he said.
Elliott Jordan-Doak, senior UK economist for Pantheon Macroeconomics, said, “Rate-setters will take comfort from slowing output price inflation.
“But signs that growth is accelerating after the General Election pause, and especially stronger jobs growth, will keep the Monetary Policy Committee (MPC) alert to the risk that wage growth slows more gradually than they assume.
“It remains an extremely close call, but we stick with our forecast that the MPC will wait until September to cut rates.”
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