According to the latest figures, business activity increased from 52.2 in April to 54.8 in May of this year, remaining comfortably above the all-important fifty mark which separates growth and contraction.
In addition to remaining comfortably above the fifty-mark, the latest figures posted are the best recorded since March 2012.
Along with highlighting the growth in business activity as a whole, the recent survey also revealed that for the first time since January last year, activity within all nine English regions increased.
The latest figures have shown that in the East of England, business activity climbed for the sixth month running; whilst Yorkshire and Humber, and London were the two best performing regions, posting figures of 57.6 and 56.4 respectively.
Meanwhile, output growth for private sector firms throughout the West Midlands increased from 49.8 in April to 53.9.
The latest data adds to the growing optimism surrounding the UK economy and businesses, following positive results from construction and service sector surveys earlier this month.
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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( 3 / 497 )The Chancellor George Osborne has launched a fresh attack on the EU’s proposed financial transactions tax (FTT), calling it “poorly designed”, “badly timed” and “unlawfully extraterritorial” and has urged the EU to scale the proposals back.
Mr Osborne made the comments in a letter responding to complaints about the proposed tax from major EU financial services trade bodies, including the European Banking Federation and the International Capital Markets Association (ICMA).
The current EU proposals state that any trade in euro-dominated financial instruments and any transaction with a bank from the 11-nation group that has signed up to it, or one of its overseas branches, would be subject to the tax, regardless of where the deal took place.
However, the Chancellor feels that this aspect of the levy would have serious implications for financial institutions in non-participating member states, such as the UK. Indeed, the Government is so opposed to this that it launched legal proceedings against the tax in protest at how the knock-on effects could adversely impact the economy
Mr Osborne added that the proposed tax calls into question the EU's commitment to growth and its standing in key global talks on regulatory reform, saying it would “disrupt the diverse markets used by corporates to raise financing for long-term investment”.
In the Chancellor’s view, the single market would also be undermined by the tax, which would split the tax treatment of derivatives into two regimes and would also "conflict with G20 regulatory reforms in numerous ways including in relation to collateral and bank funding instruments.”
There have already been suggestions that some of the 11 member states that signed up originally to the tax may be having a change of heart, amid predictions that it could end up only raising a tenth of the €35bn originally forecast.
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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( 3 / 452 )Following on from good news in manufacturing and construction earlier this week, the latest Markit/CIPS Services Purchasing Managers' Index (PMI) appears to show the fastest rate of growth in May since March 2012.
The PMI for the services sector, which accounts for around 75 per cent of the economy and covers things like transport, communication, business services and the leisure industry, rose to 54.9 in May from 52.9 in April, easily beating the forecast of 53 expected by most economists. Any reading above 50 indicates growth.
The latest figures were boosted by the arrival of better weather during the month and the sharpest rise in new business growth since February 2010. The upturn in new work was helped by a willingness among customers to commit to new business, the survey panel found.
The combination of results also suggests that growth in the economy in the second quarter of the year will at least match the 0.3 per cent recorded in Q1 and some economists are even predicting a modest rise to 0.5 per cent.
The fact that all the major sectors have shown growth for the first time in a year led a senior Markit economist to comment that the UK economy has "all cylinders now firing".
The economist added that the increasingly buoyant picture and improved outlook suggested by the data effectively “kills off” any chance of the Bank of England's Monetary Policy Committee (MCP) voting for more stimulus, such as asset purchases, for the foreseeable future.
The MCP will announce today (June 6) whether or not it will boost the economy with further quantitative easing but the news this week means that this is now very unlikely.
The meeting will be the last attended by Bank of England Governor Sir Mervyn King, before Mark Carney replaces him on July 1.
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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( 2.9 / 474 )The UK construction sector unexpectedly returned to growth in May after shrinking for six consecutive months, according to survey data released this week by Markit Economics and the Chartered Institute of Purchasing and Logistics (CIPS).
Economists had forecast a modest increase to 49.8 but the Construction Purchasing Managers’ Index (PMI) shot over the 50 mark that separates contraction from growth to 50.8, up from 49.4 in April.
The PMI survey also found that house building in May was at its fastest pace for 26 months, although the amount of spending on commercial and civil engineering projects has continued to fall, albeit at a slower rate than in the previous month.
Additionally, new orders received by construction firms increased for the first time in a year and reflecting these business wins, production increased for the first time since October 2012.
Meanwhile, employment levels in the sector were broadly unchanged during the month, with subdued underlying demand and a corresponding lack of pressure on operating capacity discouraging firms from raising headcounts.
The outlook component of the survey also showed that confidence among entrepreneurs in the construction sector improved in May, with the majority anticipating an increase in output over the next twelve months.
However, despite the promising data, a Markit economist warned that the latest figures suggest that the sector is too reliant on residential building work for growth.
This is unlikely to change, as the Government announced measures to boost construction of new residential properties in the Budget, including the Help to Buy scheme, which supports people looking to buy their first home.
Elsewhere, an industry survey conducted by the British Retail Consortium showed that retail sales increased more than expected in May, as shops managed to attract customers despite the unfavourable weather conditions, further brightening the outlook for the economy.
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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( 3 / 470 )A survey published yesterday (June 3rd) showed that the UK’s manufacturing sector grew at its strongest pace in over a year during May, the second month running that the sector has expanded, helping to boost optimism that recovery from the financial crisis is becoming broader.
The Markit/CIPS Purchasing Managers' Index rose to 51.3 in May from an upwardly revised 50.2 in April, more than a full point higher than the consensus forecast. April's reading was originally below the 50 figure that divides growth from contraction.
In addition, the survey showed that both production and new orders had increased, with the domestic market driving demand for new business, while for the first time in four months there was an indication of job creation.
Meanwhile a run down of finished goods stocks suggests that output could rise even further in the months to come as firms replenish their warehouse stocks.
The survey result will undoubtedly have a bearing on the discussions between the members of the Bank of England’s Monetary Policy Committee (MPC) when they meet this Thursday (June 6th) to conclude their policy decisions for June.
The MCP is widely expected to refrain from further quantitative easing at the meeting, and a Markit economist commented that signs the sector is recovering would add further weight to the committee’s decision to wait and see before adding to its accommodative policy stance.
The fact that manufacturing is growing will also be a fillip to the economy generally, as although the sector only accounts for just over 10 per cent of the economy, it has a positive knock-on effect on services.
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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