S&P Global — 5 September 2024
Daily Update: September 5, 2024
Good News Continues for UK Economy
By Nathan Hunt
Start every business day with our analyses of the most pressing developments affecting markets today, alongside a curated selection of our latest and most important insights on the global economy
The UK economy had been in a prolonged swoon since Brexit, with weak growth, high unemployment and stubborn inflation. However, the heat of summer appears to have led to a revival.
Following the victory of the Labour Party under new Prime Minister Keir Starmer, the flash Purchasing Managers’ Index (PMI) survey data for July showed a significantly more promising outlook for the UK economy. The data indicated that the UK’s GDP grew at a quarterly rate of just over 0.2%. The manufacturing sector enjoyed a significant upturn, job growth climbed to a 13-month high and demand bounced back. The composite PMI Prices Charged Index for the month was consistent with core consumer price inflation cooling to about 2.5%, within spitting distance of the Bank of England’s 2% target inflation rate.
Preliminary PMI survey data for August continues to paint a rosy picture for the UK economy. The flash PMI indicated that the economy is expanding at a solid quarterly rate of about 0.3%, a slight improvement on July’s data. Output has also ticked higher, with the seasonally adjusted S&P Global UK PMI Composite Output Index rising to 53.4 in August from 52.8 in July.
Job creation hit a 16-month high in August, with approximately 100,000 jobs being added to the economy in the third quarter. The revived manufacturing sector continued to lead the way, and services also showed improvement.
The Bank of England lowered rates by 25 basis points to 5% at its July meeting. So far, lower rates and lower unemployment do not seem to have accelerated inflation, which continues to trend toward the target rate.
The continued outperformance of the UK economy is unexpected. For the last two months, the UK has outperformed all other major developed economies except for the US. The UK economy rebounded in the first half of 2024 from the recession of 2023, but the effects of this rebound have only become clear since the second half of the year began.
“Looking ahead, future output expectations softened in both manufacturing and services in August, though the overall level of optimism remained well above the survey's long-run average,” said Chris Williamson, chief business economist for S&P Global Market Intelligence. “Thus, while the pull-back in sentiment hints at output growth potentially slowing in September, any slowdown is likely to be only modest, with contraction avoided in the near term.”
Today is Thursday, September 5, 2024, and here is today’s essential intelligence.
Prioritizing Employee Wellbeing May Help Stem The Tide Of Rising Turnover
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—Read the article from S&P Global Sustainable1
Top Five Economic Takeaways From August's PMI As The Global Manufacturing Decline Continues
At 49.5, down from 49.7 in July, the Global Manufacturing PMI, sponsored by J.P.Morgan and compiled by S&P Global Market Intelligence, signaled a deterioration of operating conditions for a second successive month in August. The rate of decline, while only very modest, was the steepest since last December. The deterioration points to a halting of the manufacturing recovery seen in the first half of the year, which had seen the sector's best performance for two years.
—Read the article from S&P Global Market Intelligence
Listen: Private Markets 360° | Episode 16: Staking Claims — Inside The Business Of GP Stakes
Anthony Maniscalco, Managing Partner and Head of Strategic Capital Group at Investcorp, joins our hosts to discuss the dynamic realm of GP stakes. In this episode, we explore Anthony’s professional journey into GP stakes investments, how Investcorp operates in this area, and advice for newer entrants into private markets.
—Listen and subscribe to the podcast from S&P Global Market Intelligence
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—Read the article from S&P Global Commodity Insights
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—Read the article from S&P Global Commodity Insights
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—Read the article from S&P Global Ratings
Webinar: The Path To Unlocking Value In Your ESG Reporting Journey, Featuring Novisto (Sept. 10, 2024)
Capital markets, regulatory bodies, employees, third-party data providers and customers alike are increasingly seeking transparency from companies on their performance in managing environmental, social and governance (ESG) issues. The time is now to get ESG right and own your narrative for important stakeholders. Join our upcoming webinar where our experts will discuss the importance of quality ESG data collection/management.
—Register for the webinar from S&P Global Market Intelligence