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Strong UK PMI data bodes well, but signals more price pressure

21st May 2021

Commenting on this morning’s UK PMI data, Melanie Baker, Senior Economist at Royal London Asset Management said:

“This was another strong UK PMI reading helped by continued reopening after the lockdown earlier this year. Business optimism rose too, boding well for the near-term outlook.

“As in the Euro area, the UK PMI also signalled significant price pressures, however. Both input and output cost PMIs rose as companies passed on increased costs. This does not necessarily mean that consumers will experience significantly higher prices. However, it supports the view that we are still some way off the peak in UK consumer price inflation this year.”

“It was reassuring to see another strong improvement in the employment PMI. Until the Spring, this indicator had been weak in the UK, but now signals a rapidly improving labour market.

–ENDS–