Commuters crossing London Bridge, in central London. Britain's economy saw a surge in business activity in February as Omicron restrictions eased. PA
Commuters crossing London Bridge, in central London. Britain's economy saw a surge in business activity in February as Omicron restrictions eased. PA
Commuters crossing London Bridge, in central London. Britain's economy saw a surge in business activity in February as Omicron restrictions eased. PA
Commuters crossing London Bridge, in central London. Britain's economy saw a surge in business activity in February as Omicron restrictions eased. PA

Britain’s economy roars back to life in February but inflation pressure persists


Alice Haine
  • English
  • Arabic

Britain’s economy bounced back in February, with private sector activity at its strongest in eight months after consumer spending on travel, leisure and entertainment roared back to life as the threat posed by the Omicron variant of the coronavirus eased off.

The IHS Markit/CIPS composite Purchasing Managers' Index rose to 60.2 in February from 54.2 in January, its highest level since June 2021 eight months. However, the resurgence was accompanied by intensifying inflation pressure, with costs rising at the second-fastest pace on record.

“With the PMI’s gauge of output growth accelerating markedly in February and cost pressures intensifying to the second highest on record, the odds of an increasingly aggressive policy tightening have shortened, with a third back-to-back rate rise looking increasingly inevitable in March,” said Chris Williamson, chief business economist at Markit.

Traders are pricing in a 25 basis-point interest-rate increase when the Bank of England meets in March, with the strong possibility of a 50 basis-point rise, a move unheard of since the central bank gained independence in 1997.

With headline inflation at a 30-year high of 5.5 per cent in January and expected to peak at 7.25 per cent in April, according to the BoE, more than triple the bank’s target, policymakers are expected to deliver a series of rate rises this year that will drive up benchmark borrowing costs to about 2 per cent by the end of 2021.

The move comes as British households face a cost-of-living crunch amid rising energy prices and higher tax.

Britain's economy had just returned to its pre-pandemic size before it was hit by the Omicron variant in December.

As a result, the PMI index sank to a 10-month low of 53.6 in December when Britons were advised to work from home due to Omicron and many chose to cut back on socialising in the run-up to Christmas.

February's rise was driven by an increase in the flash services PMI to 60.8, from 54.1 in January, while the manufacturing PMI was unchanged at 57.3.

“Private sector companies reported another steep increase in incoming new work in February,” IHS Markit said.

“Stronger client demand was widely linked to improving confidence about the UK economic outlook and roll back of pandemic restrictions.”

Monday's PMI data also showed the composite input cost index rose to 81.8 from 80.2 — the second highest reading on record after November's 83.2. Higher wages, energy bills and raw material costs all contributed to rising operating expenses.

Hiring rose at the fastest rate since October, with tightness in the employment market — where there is a record number of job vacancies — one of the main reasons why the BoE fears that high inflation could be slow to dissipate.

The eurozone economic recovery also rebounded sharply this month as an easing of coronavirus restrictions gave a boost to the bloc's dominant service industry, a survey showed. However, consumers faced prices rising at a record rate.

As the Omicron coronavirus variant swept across Europe, some governments reimposed measures to contain its spread. With large parts of the population now vaccinated, many of those measures have been eased.

IHS Markit's Flash Composite Purchasing Managers' Index, considered to be a guide to overall economic health, jumped to a five-month high of 55.8 in February, from 52.3 in January, with the PMI for the service industry rising to 55.8, from 51.1, a five-month high.

“The eurozone economy regained momentum in February as an easing of virus-fighting restrictions led to renewed demand for many consumer services such as travel, tourism and recreation, and helped alleviate supply bottlenecks,” said Chris Williamson, chief business economist at IHS Markit.

Richard Amaro, senior economist at Oxford Economics, said the February surge was driven by much faster growth in services and very solid trends in manufacturing, despite some slight easing in the pace of growth in February.

“The forward-looking indicators were also encouraging as year-ahead sentiment rose in February to its strongest since June 2021,” said Mr Amaro.

“The weak start to the year means that eurozone GDP growth is likely to remain modest in Q1 [the first quarter], but today’s PMI results chime with our forecast that solid growth will resume in Q2.”

Andrew Kenningham, chief Europe economist at Capital Economics, also expects the eurozone economy to expand at a reasonable pace in the first quarter and accelerate in the next two quarters as tourism, travel and hospitality continue to normalise.

“But inflationary pressures will stay very strong for many months yet,” he said.

SPEC%20SHEET%3A%20APPLE%20IPHONE%2015%20PRO%20MAX
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UAE currency: the story behind the money in your pockets
The years Ramadan fell in May

1987

1954

1921

1888

Labour dispute

The insured employee may still file an ILOE claim even if a labour dispute is ongoing post termination, but the insurer may suspend or reject payment, until the courts resolve the dispute, especially if the reason for termination is contested. The outcome of the labour court proceedings can directly affect eligibility.


- Abdullah Ishnaneh, Partner, BSA Law 

The Details

Kabir Singh

Produced by: Cinestaan Studios, T-Series

Directed by: Sandeep Reddy Vanga

Starring: Shahid Kapoor, Kiara Advani, Suresh Oberoi, Soham Majumdar, Arjun Pahwa

Rating: 2.5/5 

The burning issue

The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE.

Part three: an affection for classic cars lives on

Read part two: how climate change drove the race for an alternative 

Read part one: how cars came to the UAE

Ticket prices

General admission Dh295 (under-three free)

Buy a four-person Family & Friends ticket and pay for only three tickets, so the fourth family member is free

Buy tickets at: wbworldabudhabi.com/en/tickets

Turning%20waste%20into%20fuel
%3Cp%3EAverage%20amount%20of%20biofuel%20produced%20at%20DIC%20factory%20every%20month%3A%20%3Cstrong%3EApproximately%20106%2C000%20litres%3C%2Fstrong%3E%3C%2Fp%3E%0A%3Cp%3EAmount%20of%20biofuel%20produced%20from%201%20litre%20of%20used%20cooking%20oil%3A%20%3Cstrong%3E920ml%20(92%25)%3C%2Fstrong%3E%3C%2Fp%3E%0A%3Cp%3ETime%20required%20for%20one%20full%20cycle%20of%20production%20from%20used%20cooking%20oil%20to%20biofuel%3A%20%3Cstrong%3EOne%20day%3C%2Fstrong%3E%3C%2Fp%3E%0A%3Cp%3EEnergy%20requirements%20for%20one%20cycle%20of%20production%20from%201%2C000%20litres%20of%20used%20cooking%20oil%3A%3Cbr%3E%3Cstrong%3E%E2%96%AA%20Electricity%20-%201.1904%20units%3Cbr%3E%E2%96%AA%20Water-%2031%20litres%3Cbr%3E%E2%96%AA%20Diesel%20%E2%80%93%2026.275%20litres%3C%2Fstrong%3E%3C%2Fp%3E%0A
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The Voice of Hind Rajab

Starring: Saja Kilani, Clara Khoury, Motaz Malhees

Director: Kaouther Ben Hania

Rating: 4/5

Ammar 808:
Maghreb United

Sofyann Ben Youssef
Glitterbeat 

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The specs: 2018 Maserati Ghibli

Price, base / as tested: Dh269,000 / Dh369,000

Engine: 3.0-litre twin-turbocharged V6

Transmission: Eight-speed automatic

Power: 355hp @ 5,500rpm

Torque: 500Nm @ 4,500rpm

Fuel economy, combined: 8.9L / 100km

THREE
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The%C2%A0specs%20
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MATCH INFO

Manchester City 3 (Silva 8' &15, Foden 33')

Birmginahm City 0

Man of the match Bernado Silva (Manchester City)

Key facilities
  • Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
  • Premier League-standard football pitch
  • 400m Olympic running track
  • NBA-spec basketball court with auditorium
  • 600-seat auditorium
  • Spaces for historical and cultural exploration
  • An elevated football field that doubles as a helipad
  • Specialist robotics and science laboratories
  • AR and VR-enabled learning centres
  • Disruption Lab and Research Centre for developing entrepreneurial skills
Uefa Champions League play-off

First leg: Wednesday, 11pm (UAE)
Ajax v Dynamo Kiev

Second leg: Tuesday, August 28, 11pm (UAE)
Dynamo Kiev v Ajax

Royal wedding inspired menu

Ginger, citrus and orange blossom iced tea

Avocado ranch dip with crudites

Cucumber, smoked salmon and cream cheese mini club sandwiches

Elderflower and lemon syllabub meringue

RACECARD%20
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'Young girls thinking of big ideas'

Words come easy for aspiring writer Afra Al Muhairb. The business side of books, on the other hand, is entirely foreign to the 16-year-old Emirati. So, she followed her father’s advice and enroled in the Abu Dhabi Education Council’s summer entrepreneurship course at Abu Dhabi University hoping to pick up a few new skills.

“Most of us have this dream of opening a business,” said Afra, referring to her peers are “young girls thinking of big ideas.”

In the three-week class, pupils are challenged to come up with a business and develop an operational and marketing plan to support their idea. But, the learning goes far beyond sales and branding, said teacher Sonia Elhaj.

“It’s not only about starting up a business, it’s all the meta skills that goes with it -- building self confidence, communication,” said Ms Elhaj. “It’s a way to coach them and to harness ideas and to allow them to be creative. They are really hungry to do this and be heard. They are so happy to be actually doing something, to be engaged in creating something new, not only sitting and listening and getting new information and new knowledge. Now they are applying that knowledge.”

Afra’s team decided to focus their business idea on a restaurant modelled after the Leaning Tower of Pisa. Each level would have a different international cuisine and all the meat would be halal. The pupils thought of this after discussing a common problem they face when travelling abroad.

“Sometimes we find the struggle of finding halal food, so we just eat fish and cheese, so it’s hard for us to spend 20 days with fish and cheese,” said Afra. “So we made this tower so every person who comes – from Africa, from America – they will find the right food to eat.”

rpennington@thenational.ae

Abu Dhabi race card

5pm Abu Dhabi Fillies Classic Prestige Dh110,000 1,400m

5.30pm Abu Dhabi Colts Classic Prestige Dh110,000 1,400m

6pm Abu Dhabi Championship Listed Dh180,000 1,600m

6.30pm Maiden Dh80,000 1,600m

7pm Wathba Stallions Cup Handicap Dh80,000 1,400m

7.30pm Handicap (TB) |Dh100,000 2,400m

Company%20Profile
%3Cp%3E%3Cstrong%3EName%3A%3C%2Fstrong%3E%20Neo%20Mobility%3Cbr%3E%3Cstrong%3EStarted%3A%3C%2Fstrong%3E%20February%202023%3Cbr%3E%3Cstrong%3ECo-founders%3A%3C%2Fstrong%3E%20Abhishek%20Shah%20and%20Anish%20Garg%3Cbr%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20Dubai%3Cbr%3E%3Cstrong%3EIndustry%3A%3C%2Fstrong%3E%20Logistics%3Cbr%3E%3Cstrong%3EFunding%3A%3C%2Fstrong%3E%20%2410%20million%3Cbr%3E%3Cstrong%3EInvestors%3A%3C%2Fstrong%3E%20Delta%20Corp%2C%20Pyse%20Sustainability%20Fund%2C%20angel%20investors%3C%2Fp%3E%0A
F1 The Movie

Starring: Brad Pitt, Damson Idris, Kerry Condon, Javier Bardem

Director: Joseph Kosinski

Rating: 4/5

Updated: February 21, 2022, 11:13 AM