UK economic growth slowed again in August as post-lockdown shortages bite -PMI By Reuters

© Reuters. FILE PHOTO: The Metropolis of London monetary district could be seen as folks stroll alongside the south aspect of the River Thames, amid the coronavirus illness (COVID-19) outbreak in London, Britain, March 19, 2021. REUTERS/Henry Nicholls

LONDON (Reuters) – Britain’s post-lockdown financial bounce-back slowed sharply in August as corporations struggled with unprecedented shortages of workers and supplies, however sturdy inflation pressures cooled a bit, a survey confirmed on Monday.

The IHS Markit/CIPS flash composite PMI dropped for the third month in a row, sinking to 55.3 from 59.2 in July, its lowest since February and a sharper fall than a median forecast of 58.4 in a Reuters ballot of economists.

The tempo of progress was barely above the pre-pandemic common however “there are clear indicators of the restoration shedding momentum within the third quarter after a buoyant second quarter”, stated Chris Williamson, chief enterprise economist at IHS Markit.

“Regardless of COVID-19 containment measures easing to the bottom for the reason that pandemic started, rising virus case numbers are deterring many types of spending, notably by customers, and have hit progress through worsening workers and provide shortages.”

Firms have complained that self-isolation necessities for contacts of individuals with COVID-19 have made it exhausting for them to seek out sufficient workers however these necessities had been dropped from Aug. 13 for individuals who have had two vaccinations.

On a brighter observe, a measure of employment hit a report excessive as furloughed employees return to their jobs and companies had been extra optimistic about future output.

A gauge of enter costs fell after hitting a greater than 20-year excessive in July and the costs charged by factories moved additional away from June’s report excessive.

The Financial institution of England is watching to see whether or not a soar in inflation turns into extra cussed worth progress.

The BoE stated earlier this month it anticipated “modest financial tightening” could be wanted over its three-year forecast interval.

The autumn within the PMI was largely pushed by providers corporations who make up the majority of Britain’s economic system. Manufacturing dipped solely barely though automotive and electrical items manufacturing fell into decline due primarily attributable to provide constraints.

Information for the survey was collected between Aug. 12 and Aug. 19.

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