Log in
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Dynamic quotes 

MarketScreener Homepage  >  News  >  Economy & Forex

News : Latest News
Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesBusiness LeadersFinance Pro.CalendarSectors 
All NewsEconomyCurrencies & ForexEconomic EventsCryptocurrenciesCybersecurityPress Releases

UK firms see brighter 2021 after vaccine news, surveys show

12/03/2020 | 07:14am EST
FILE PHOTO: The outbreak of the coronavirus disease (COVID-19), in London

LONDON (Reuters) - British businesses in the service sector grew more optimistic about 2021 following news of COVID-19 vaccines, despite the first fall in activity since June as a four-week partial lockdown across England took its toll.

The IHS Markit/CIPS UK services Purchasing Managers' (PMI) dropped to 47.6 in November from 51.4 in October, the first time since June that it fell below the 50 level that divides growth from contraction.

But this was a much smaller decline than during the first lockdown in April, when the PMI hit a record-low of 13.4, and less of a slowdown than an earlier 'flash' November reading of 45.8.

The composite PMI, which includes manufacturers who enjoyed stronger growth, dropped to 49.0 from 52.1.

News of effective COVID-19 vaccines also boosted business optimism in the services PMI, which rose to its strongest since February's five-year high.

Samuel Tombs, an economist at Pantheon Macroeconomics, said the downturn could still prove significant, as a separate survey from Britain's Office for National Statistics pointed to a hefty 3% monthly drop in revenue in early November.

"We still look for around a month-to-month drop in GDP of about 5% in November, followed by an incomplete rebound of around 4% in December," he said.

Britain's economy suffered a record 25% fall in output in March and April. The Bank of England forecast this month that output would fall just 2% in the final three months of 2020.

Thursday's PMI survey showed job losses continued for a ninth consecutive month, the longest run since 2010.

Unemployment is forecast to rise further during the months it will take to roll out the vaccine to millions of Britons.

While some sectors such as retail - which is not covered by the PMI - and hospitality have been hard hit by the second lockdown, others have found it easier to adapt, IHS Markit said.

A Bank of England (BoE) survey showed optimism for 2021. Businesses expected sales in the second quarter of 2021 would be only 2% below pre-pandemic levels, less severe than an 8% shortfall forecast a month earlier.

The services PMI survey took place from Nov. 12-26, while the BoE survey was conducted from Nov. 6-20, meaning most responses came after news of the initial COVID-19 vaccine breakthrough from Pfizer and BioNTech on Nov. 9.

Businesses that traded with the European Union also told the BoE they were more prepared for new post-Brexit customs requirements from Jan. 1. - though almost a third said they were still only partly or not at all prepared with just weeks to go.

(Reporting by David Milliken; Editing by Hugh Lawson and Mark Potter)

By David Milliken

© Reuters 2020
Stocks mentioned in the article
ChangeLast1st jan.
EURO / BRITISH POUND (EUR/GBP) 0.11% 0.889 Delayed Quote.-0.24%
IHS MARKIT LTD. 1.06% 84.77 Delayed Quote.-6.60%
Latest news "Economy & Forex"
01:33pU.s. cdc says 1,610,524 individuals have received two doses of covid-19 vaccine as of jan. 15 vs 1,342,086 individuals as of as of jan. 14
01:33pU.s. cdc says 10,595,866 individuals have received one or more doses of covid-19 vaccine as of jan. 15 vs 9,690,757 individuals as of as of jan. 14
01:32pU.s. cdc says 1,384,963 doses of covid-19 vaccine administered in long-term care homes as of jan 15 vs 1,225,493 doses administered as of jan 14
01:32pU.s. cdc says administered 12,279,180 doses of covid-19 vaccine as of jan 15 vs 11,148,991 doses administered as of jan 14
01:32pDating app Bumble reveals steady revenue growth, losses in IPO filing
01:32pU.s. cdc says distributed 31,161,075 doses of covid-19 vaccine as of jan 15 vs 30,628,175 doses distributed as of jan 14
01:31pGlobal COVID-19 death toll tops 2 million
01:29pWSOG LLC : WSGF To Publish Real Estate Cryptocurrency Survey Results Next Week
01:25pApple fails to overturn VirnetX patent verdict, could owe over $1.1 billion
01:25pU.S. drillers add oil and gas rigs for 8th week in a row -Baker Hughes
Latest news "Economy & Forex"