UK business activity extends Covid recovery

London: Britain´s private sector business activity continues to expand at a near-record pace as the economy reopens from Covid lockdown, a key survey showed on Wednesday.

The composite purchasing managers´ index (PMI) slowed only slightly to 61.7 points in June, compilers IHS Markit and the Chartered Institute of Procurement and Supply said in a statement.

The figure held significantly above the key 50 level to indicate strong expansion after a record performance in May.

"June saw further strong growth in output across the UK private sector," the statement noted.

"Marked increases in output were seen across both the manufacturing and service sectors as the economy continued to reopen following the Covid-19 lockdown earlier in the year."

IHS Markit added that businesses took on new staff at an "unprecedented rate" at the end of the second quarter, but warned also over growing inflationary pressures.

The PMI had already soared in May to 62.9, hitting the highest level since the index began in 1998, as manufacturing and services strengthened on easing Covid-19 curbs.

The economy is now expected to rebound in the current second quarter, or three months to June, after shrinking by 1.5 percent in the first quarter.

"Businesses are reporting an ongoing surge in demand in June as the economy reopens, led by the hospitality sector, meaning the second quarter looks to have seen economic growth rebound very sharply from the first quarter´s decline," said IHS Markit chief business economist Chris Williamson.

"There are some signs that the rate of expansion appears to have peaked, as both output and new order growth cooled slightly from May´s record performances, but full order books and a further loosening of virus-fighting restrictions should nevertheless help ensure growth remains strong as we head through the summer."