2020 started with a big blow on all businesses. The Covid-19 pandemic stopped all business activities. Covid-19 restricted mobility shrank economies and caused job shedding. It did not spare the biggest economies either. The United Kingdom had its fair share of financial damage. However, the UK decided to re-open its economy in August. August saw the fastest growth numbers in seven years. Although it is largely due to the previous stagnation, the growth exceeded expert forecasts.
The Bouncing Back of the Economy is Sharper than Predicted
Almost all the countries around the world applied restrictions on financial activities during Covid-19. As the pandemic’s effects are diminished, these transactions started to come back to life. The UK, too, decided to lift restrictions after months of inactivity. As a result, August 2020 enjoyed the highest growth numbers of the last seven years.
One of the important measures of growth is the PMI (The IHS Markit/Cips Composite Purchasing Managers’ Index). The PMI jumped up to 60.3 in August. The index was at 57 in July. 60.3 stands as the biggest growth of the last seven years. Experts’ predictions for the period were around 57.1. The economics director of HIS Markit, Tim Moore, said, “There were encouraging signs that customer-facing service providers have started to catch up with the rebound seen earlier this summer across the wider economy.”
2020 started with a big blow on all businesses. The Covid-19 pandemic stopped all business activities. Covid-19 restricted mobility, shrank economies, and caused job shedding. It did not spare the biggest economies either. The United Kingdom had its fair share of financial damage. However, the UK decided to re-open its economy in August. August saw the fastest growth numbers in seven years. Although it is largely due to the previous stagnation, the growth exceeded expert forecasts.
The Bouncing Back of the Economy is Sharper than Predicted
Almost all the countries around the world applied restrictions on financial activities during Covid-19. As the pandemic’s effects are diminished, these transactions started to come back to life. The UK, too, decided to lift restrictions after months of inactivity. As a result, August 2020 enjoyed the highest growth numbers of the last seven years.
One of the important measures of growth is the PMI (The IHS Markit/Cips Composite Purchasing Managers’ Index). The PMI jumped up to 60.3 in August. The index was at 57 in July. 60.3 stands as the biggest growth of the last seven years. Experts’ predictions for the period were around 57.1. The economics director of HIS Markit, Tim Moore, said, “There were encouraging signs that customer-facing service providers have started to catch up with the rebound seen earlier this summer across the wider economy.”
The PMI Shows Good Signs for the UK Economy
Although it is early to conclude anything, the PMI predicts a brighter future for the UK economy. The chief economic advisor to the EY Item Club, Howard Archer, remarked that the numbers of the PMI are “boding well for third-quarter growth prospects”.
The next step of recovery seems to be to solve the unemployment problem caused by the pandemic. The chair of the Federation of Small Businesses, Mike Cherry, argued, “After months of measures to ensure job and business survival, the next stage is about how we can grow once again to aid business and job creation.”
The unemployment problem is predicted to diminish as the economy recovers slowly. With the indications of the PMI, the UK economy is set to be back on its track soon. Hopefully, the high growth rates of August will aid recovery in the final quarter of 2020, too.
The PMI numbers also showed that the demand in businesses increased both in July and August. It means that the parties of business activity are regaining trust in performing transactions.
