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Recession fears are easing as business picks up after a bleak autumn and winter
Fears that Britain is heading for recession are abating as business picks up after a bleak autumn and winter.
In a report pushing the pound higher, S&P Global said its index of private sector activity had risen from 48.5 in January to 53 in February.
That was the first reading above the 50 threshold for growth since last July and the strongest performance in eight months.
In a report pushing the pound higher, S&P Global said its index of private sector activity rose from 48.5 in January to 53 in February
The corporate sector in the Eurozone achieved a score of 52.3. “After six months of gloom, the sun came out in February,” said John Glen of the Chartered Institute of Procurement and Supply, which co-authored the report with S&P Global.
Susannah Streeter, senior investment and market analyst at Hargreaves Lansdown, added: “Businesses have shrugged off the downfall of autumn funk and with confidence returning, there is high hope that a UK recession will be circumvented.”
The pound surged above $1.21 and €1.13 as investors bet that the Bank would go ahead with another rate hike next month.
The services sector drove the recovery as “lower economic uncertainty, reduced supply chain shortages and declining inflation” boosted confidence.
The Bank has raised interest rates from 0.1 percent in 2021 to 4 percent to tackle inflation. But with inflation falling from a high of 11.1 percent to 10.1 percent, it is hoped that rates are close to their peak.
Chris Williamson, chief business economist at S&P Global, said: “While many companies continue to report difficult business conditions, especially in the manufacturing sector, the broader business mood is supported by signs of a spike in inflation, improving supply chains and a decreasing risk of recession. .’
However, he warned that the possibility of a recession later this year should not be ruled out.