Post‑Election Boom: UK Businesses Are Feeling Sunny‑Side Up
Since the general election, the private sector in the UK is showing a big smile. Business confidence has bounced back with a stronger surge in activity across the board.
Key Numbers to Watch (July 2023)
- U.S. PMI (Services & Manufacturing): 52.7 – up from 52.3 in June, beating the 52.5 forecast.
- UK Company Sentiment: Firms are leaning into the future, reporting a fresh wave of demand and bringing on more staff.
- Price Growth: Prices climb at the slowest rate in three and a half years, hinting at a possible summer rate cut.
What Economists Say
Chris Williamson (S&P Global) believes the post‑election survey paints a “welcome picture” for the new government. He notes that British businesses are suddenly more optimistic and are hiring more rapidly.
Elliott Jordan‑Doak (Pantheon Macroeconomics) shares similar good vibes but adds a cautionary note: “Rate‑setters will feel reassured by the slowing inflation, but the momentum in growth and jobs is still a red flag for the MPC. We expect a rate cut only in September.”
Why It Matters
Lower inflation is a win for consumers – a less steep jolt to everyday expenses. Yet the steady surge in hiring shows that businesses aren’t stepping back. The mix of optimism and caution means the Monetary Policy Committee will keep a close eye on wage growth to decide the timing of any rate cuts.
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