In a sign of steadying economic activity, the latest S&P Global/CIPS UK Composite Purchasing Managers' Index (PMI) for December held firm at 50.5, unchanged from November's reading. The index, released on 16 December 2024, maintained its score above the crucial 50.0 threshold, indicating that business activity in the UK's manufacturing and services sectors continues to expand, albeit at a subdued pace.
Traditionally, PMI readings above 50 signal expansion, while those below it point to contraction. With two consecutive months at 50.5, the UK economy seems to be stabilizing rather than shifting into a stronger growth or contraction phase. This stability amidst a backdrop of global economic uncertainty may reflect a balance between cooling inflationary pressures and ongoing consumer challenges.
December’s consistent reading could offer some reprieve to UK businesses, policymakers, and investors who have been navigating volatile economic conditions throughout 2024. The steady PMI score suggests that, while the UK avoids economic contraction, substantial growth momentum is still elusive under current conditions. Movements in the upcoming months will be crucial in determining whether this steadiness will eventually lead to stronger growth or a recalibration of economic strategies.
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