UK Composite PMI Reaches 53.9
Business activity in the UK showed faster acceleration in February. The UK flash Composite PMI rose to 53.9, surpassing market expectations for a slight decline.
Consensus had expected the Composite PMI to fall to 53.4 from 53.7 in January. However, the opposite occurred—the February figure rose, signaling that economic activity remains quite solid.
In the PMI, a level above 50 indicates expansion (improving business activity), while below 50 indicates contraction. A reading of 53.9 indicates that UK businesses are still growing, even faster than the previous month.
Market focus had previously been on the services sector. In the preview release, the UK Services PMI was expected to come in at 53.6, slightly down from 54.0 in the previous month. Therefore, this jump in the Composite PMI suggests that activity is not as weak as feared.
For the market, a stronger PMI is usually interpreted as a signal of a more resilient economy. The impact could influence expectations about the direction of interest rate policy—as an overly strong economy could make the central bank more cautious in easing policy.
Going forward, investors will be awaiting detailed PMI components (services vs. manufacturing, new orders, input costs, and selling prices) to determine whether this strengthening is sustainable or merely a temporary effect.
Source: Newsmaker.id
