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PMI持续疲软 “滞胀”阴霾徘徊于英国经济上空

PMI remains weak, and the shadow of "stagflation" looms over the United Kingdom's economy.

Zhitong Finance ·  Jan 24 12:09

S&P Global stated that the key Index is just slightly above the contraction Range; with increasing price pressures, the risk of stagflation is becoming greater.

According to the Zhito Finance APP, at the beginning of 2025, severe worries about stagflation overshadowed the entire United Kingdom, with a highly anticipated survey report indicating that the pace of job cuts in the UK is comparable to that during the financial crisis and increased price pressures. S&P Global stated that the key Index measuring the comprehensive prosperity of the UK service and manufacturing sectors is only slightly above the contraction Range, and with the significant increase in price pressures, the risk of stagflation is growing.

The latest report released by S&P Global shows that the comprehensive Purchasing Managers' Index (PMI) rose slightly from 50.4 in December to 50.9 in January, continuing the weak trend since the second half of 2024. Although this latest data is slightly better than economists' general expectations, it is only marginally above the critical threshold of 50 that distinguishes growth from contraction in the comprehensive PMI (covering the prosperity of both the service and manufacturing sectors).

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Private enterprises in the United Kingdom are very close to the contraction zone.

S&P Global stated that, excluding the COVID-19 pandemic, the scale of corporate layoffs in the United Kingdom in January and December is the largest for any month since 2009. PMI Statistics show that UK companies have carried out layoffs for four consecutive months.

Just a few days ago, the country's second-largest grocery chain, J Sainsbury Plc, announced it would lay off up to 3,000 employees, including a 20% reduction in senior management, and all remaining in-store cafés will also be closed.

Surveys show that, following the announcement of significant tax increases in the first budget proposal of the Labour Party in the United Kingdom, and with a bleak economic outlook both domestically and internationally undermining the confidence of UK enterprises, businesses in the United Kingdom remain shrouded in the clouds of stagflation. Another report released on Friday indicated that consumer confidence in the United Kingdom fell to its lowest level in over a year in January.

"The quick preview part of the composite Purchasing Managers' Index survey for January indicates that entering 2025, adverse trends in UK economic activity are showing persistent stagnation. Although the results were stronger than expected, they still indicate ongoing weakness, with employment levels in the private sector declining further. This reinforces the Bank of England's justification for announcing a rate cut in February. We expect a 25 basis point reduction to 4.50% next month, followed by individual quarterly cuts to 3.75% by the end of the year," stated Bloomberg Economics economists Niraj Shah and Dan Hanson.

S&P Global's PMI data report shows that despite this, cost pressures on UK businesses are still growing at the fastest pace since May 2023. Prices charged on the enterprise side are also rising at the fastest rate in 18 months, making the trend of 'stagflation' very evident.

Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, stated: "Inflation pressures in the United Kingdom have flared up again, and the tendency towards a stagflation environment presents an increasingly severe policy dilemma for the Bank of England." He added that due to declining sales and concerns over the business outlook, UK enterprises have been continuing their pace of "layoffs."

There are also worrying signs regarding the future outlook of the UK economy, with expectations for UK economic activity reaching their lowest level since Liz Truss's brief tenure as Prime Minister at the end of 2022. New job creation has also declined at the fastest rate in over a year.

Since the second half of 2024, growth in the United Kingdom has sharply slowed down. The UK economy failed to show expansion in the third quarter, and after a significant decline in business and consumer confidence, the Bank of England predicts that fourth-quarter GDP will "be flat"—a subtle balance of neither growth nor recession.

Williamson, Chief Business Economist at S&P Global Market Intelligence, stated: "While the stagnation of the economy and the deterioration of the UK job market indicate an increased necessity for the Bank of England to cut rates to stimulate economic growth, rising price pressures suggest that the specter of inflation may return at any time."

The translation is provided by third-party software.


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