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The latest data showed that the UK private sector grew at the fastest pace since April 2024 this month, amid an improvement in the services sector.
The closely watched S&P Global Flash UK Composite Purchasing Managers’ Index (PMI) read 53.9 in January, up from 51.4 in December.
Flash data based on preliminary data.
Any score above 50.0 means activity is growing, while any score below 50.0 means activity is contracting.
The data was significantly stronger than expected, with economists predicting growth of 51.5 for the month.
Chris WilliamsonS&P Global Market Intelligence chief business economist said: “British businesses accelerated in January, showing encouraging resilience in the face of recent geopolitical tensions.
“Companies reported increased demand from domestic and export markets, pushing output growth to its fastest pace since April 2024.
“Businesses also reported their highest levels of optimism about the business outlook since the Autumn Budget 2024.”
Research shows that growth in the UK services sector also hit a 21-month high in January.
Many companies surveyed said they benefited from post-budget clarity, allowing new projects to start and investment to flow.
Manufacturing output also rose this month, reaching its highest level since October, and some commodities companies reported improved export sales.
Total new orders were higher in a third of the past four months, pointing to a broader improvement in economic activity.
Despite this, companies remain pessimistic about employment, with the number of people employed falling from the previous month.
Thomas Pugh, chief economist at RSM UK, said: “The flash memory composite index has risen sharply. purchasing managers index This suggests that post-budget activity is seeing a good rebound as uncertainty dissipates.
“Signs of a rebound in growth in the first quarter are now a common pattern in the UK economy and are another reason to be skeptical of growth multipoint control The (Bank of England Monetary Policy Committee) will wait until April before cutting interest rates again. “