Daily Times

A rush of new orders in anticipation of an easing of COVID-19 lockdown restrictions prompted a much stronger rebound for British companies than expected in March, a business survey showed on Wednesday.

The flash IHS Markit/CIPS UK Composite Purchasing Managers’ Index rose to a seven-month high of 56.6 in March from 49.6 in February. A Reuters poll of economists had pointed to a reading of 51.1.

Britain’s economy shrank by 10% last year – its sharpest decline in more than 300 years – and earlier this month government budget forecasters predicted it would take until the middle of next year before it regains its pre-pandemic size. Confidence among British businesses had been bolstered by Britain’s swift roll-out of COVID-19 vaccines, one factor behind the first increase in employment since the start of the pandemic, the survey showed. “The surge in business activity is far stronger than any economists expected, according to Reuters polls, and hints at only a modest contraction of GDP during the first quarter,” said Chris Williamson, chief business economist at IHS Markit.

The survey is likely to bolster confidence among Bank of England officials that the economy is on track for a swift recovery this year.