LONDON- British businesses recorded their fastest growth in activity in nearly a year this month, according to preliminary purchasing managers’ data that points to a bigger rebound from last year’s shallow recession than economists had been expecting.
However, businesses’ costs also rose at the fastest pace in nearly a year due to rising wages and higher prices for transport and raw materials – factors which may make the Bank of England more cautious about cutting interest rates.
The S&P Global UK Composite Purchasing Managers’ Index for the services and manufacturing sectors jumped to an 11-month high of 54.0 in April from March’s 52.8, above all forecasts in a Reuters poll of economists.
The gain was led by an big rise in the services index to 54.9 from 53.1, while the index for the smaller manufacturing sector unexpectedly fell to 48.7 from 50.3, a move below 50 that takes it into contractionary territory.
Chris Williamson, chief business economist at S&P Global Market Intelligence, said the data pointed to the economy growing at a quarterly pace of 0.4 percent in April, up from an estimated 0.3 percent in the three months to March.
