- Prior 53.9
- Manufacturing PMI 51.4 vs 50.1 expected
- Prior 51.7
- Composite PMI 51.0 vs 52.9 expected
- Prior 53.7
Key Findings:
- Input price inflation jumps to its highest for just over three years amid a surge in manufacturing costs
Comment:
Chris Williamson, Chief Business Economist at S&P Global Market Intelligence:
“The war in the Middle East has hit the UK economy in March, stalling growth while driving inflation sharply higher.
“Output growth across manufacturing and services has slowed to a crawl as companies blamed lost business directly on the events in the Middle East, whether through heightened risk aversion among customers, surging price pressures, higher interest rates, or via travel and supply chain disruptions.
“Inflationary pressures have surged higher on the back of rising energy prices and fractured supply chains. The acceleration in cost growth in the manufacturing sector was especially severe, being the sharpest since the depreciation of sterling following Black Wednesday in 1992.
“The full impact on inflation and economic growth depends not just on the duration of the war but also the length of disruptions to energy markets and shipping, though March’s PMI numbers clearly underscore how downside growth risks and upside inflation risks have already materialised.
“The Bank of England faces a challenging period where it will need to balance these growth and inflation risks when setting policy, seeking to dampen the potential for the inflation spike to become more engrained while ensuring a hawkish interest rate outlook does not exacerbate downturn risks.”
