UK NEWS: UK firms see bright 2021 after vaccination news, research shows

LONDON – British businesses in the service sector are growing in optimism by 2021 following news of the COVID-19 vaccine, although it has been the first time in the industry since June as a four-week closure across England had disastrous results.

The IHS Markit / CIPS UK services Purchasing Managers ’(PMI) dropped to 47.6 in November from 51.4 in October, the first since June to fall below the 50-point mark separating growth from a decline.

But this was a much smaller decline than during the first closing in April, when the PMI hit a record low of 13.4, and dropped slightly below the previous ‘flash’ reading of November of 45.8.

The combined PMI, which includes producers who enjoyed strong growth, dropped to 49.0 from 52.1.

News of the effective vaccines for COVID-19 also boosted business confidence in PMI jobs, which has grown significantly since the top five years of February.

Samuel Tombs, an economist at Pantheon Macroeconomics, said the decline could still be seen, as separate studies from the British Office for National Statistics show a 3% monthly decline in November.

“We are still looking at a month-on-month GDP decline to about 5% in November, followed by an incomplete recovery of about 4% in December,” he said.

The British economy hit a record 25% record in March and April. The Bank of England predicted this month that the effect would drop by only 2% in the last three months of 2020.

Thursday’s PMI survey showed that job losses continue for nine consecutive months, the longest running job since 2010.

Unemployment is expected to rise steadily in the coming months, which will take a toll on millions of British people.

While other sectors such as retail – not covered by PMI – and hospitality have been hit hard by the second closure, some have found it easier to adapt, says the IHS Markit.

A study by the Bank of England (BoE) showed optimism in 2021. Businesses expected sales in the second quarter of 2021 were only 2% below the pre-epidemic levels, below the 8% deficit forecast for the previous month.

The PMI services survey took place from November 12-26, while the BoE survey was conducted from November 6-20, meaning that most of the answers came after the news of the first COVID-19 vaccination campaign from Pfizer and BioNTech on November 9.

Businesses trading with the European Union have also told the BoE that they are well-prepared for the new cultural needs created after Brexit since Jan 1. – although about a third said they were still unprepared or completely unprepared just a few weeks before.

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