Good morning, and welcome to our ongoing coverage of the global economy, financial markets, euro area and business.
After a difficult 12 months, British service companies are feeling more optimistic about their future prospects, thanks to the UK ‘s Covid-19 rapid vaccination program. Confidence in the service sector jumped in February to the highest level since the outbreak began, according to the latest Business Trends report from accounting and business consultancy BDO LLP.
The BDO Services Optimism Index rose to 94.13 in February from 86.60 in January, back towards the long-term average of 100.
That’s the highest reading in 12 months for the survey, which covers a range of businesses from sales and hospitality to professional services. In total, services account for about three-quarters of the economy.
A BDO report suggests that business confidence was rising even before Boris Johnson unveiled the four-tier plan to reopen the UK economy, where non-essential shops could open on April 12,
The continued success of the UK vaccine distribution program has led to a significant increase in the confidence of the services sector in February, according to Kaley Crossthwaite, Partner at BDO LLP, which says:
“The pace of vaccine distribution across the UK has brought great relief to businesses. “
By the end of February, more than 20 million Britons have received their first dose of coronavirus vaccine, hoping for a summer economic recovery.
Crossthwaite believes the latest government business support packages will also help:
“With business lines expanded in the shape of the long furlough scheme, and an additional dose of support given to hospitality through an expansion in industry rate relief and a VAT cut to 5%, there is reason to believe that hope to maintain this as we gradually do. emerge from locking depth. ”
However, factory leaders are not feeling as optimistic, with BDO’s Manufacturing Optimism Index dipping slightly to 83.99 in February.
BDO says “tightening the Brexit limits” runs counter to manufacturers’ hopes of rolling out the vaccine.
Separate study from Center for Economic and Industrial Research and Yougov has also shown that home and business confidence has jumped to a one-year high. Their consumer confidence index jumped to 105.4 last month, up from 103.4.
The Times has details:
“The latest rise in the consumer confidence index strengthens household resilience through this third national lockdown,” said Kay Neufeld, head of forecasting at the Center for Economics and Business Research.
“With a roadmap for a gradual reopening of the economy now published, we expect positive consumer sentiment to further support the recovery in the coming months.”
The backdrop in consumer confidence was driven by increased optimism about the expectations for businesses. The sub-index for business activity rose by more than 5.4 points to 124. This was more encouraging for the job market, with the index for job security in the coming year rising 0.9 points to 112.2 .
Allie hodgkins-donn
(@AllieHBNews)Business TIMES Monday: “Growth set for recycling as vaccine raises hopes” #TomorrowsPapersToday pic.twitter.com/uUNnrMaV8u
Also coming up today
Bank of England Governor Andrew Bailey will give his opinion on the UK’s economic outlook. He will be speaking at the Resolution Foundation event, which will examine the lasting effects of pandemic, and how monetary and macro-temperance policy can help create a strong and sustainable recovery.
New industrial production figures from Germany and Spain show the success of European factories in January.
European stock markets are expected to open significantly higher, with the FTSE 100 on track to jump by almost 1%. Last week was very volatile, especially on Wall Street, where technical stocks fell sharply – before strong U.S. labor numbers spurred a late rally.
IGSquawk
(@IGSquawk)European Opening Calls:#FTSE 6685 + 0.82%#DAX 13989 + 0.49%#CAC 5822 + 0.68%#AEX 661 + 1.13%#MIB 23173 + 0.90%#IBEX 8363 + 0.91%#OMX 2059 + 0.49%#STOXX 3696 + 0.71%#IGOpeningCall
The agenda
- 7m GMT: German industrial production for January
- 8m GMT: Spanish industrial production for January
- 10am GMT: Bank of England Governor Andrew Bailey talks about the UK’s economic situation
- 3pm GMT: US wholesale investment figures for January