Business confidence in the UK’s services sector has received a boost on account of the rapid rollout of the COVID-19 vaccines, according to latest research by the BDO. The services optimism index has improved to 94.13 during the month of February, the highest levels seen in a year.
Industries across the services sector, including some of the most affected like hospitality and retail expect business conditions to improve to pre-pandemic levels quickly, even before the government removes all the lockdown measures. In addition to the vaccine optimism, hopes for more fiscal support from the government is also supporting expectations for a rebound in the sector.
There is also hope for the labor market in the country as it moves towards recovery from the damage caused due to the multiple rounds of lockdown and restrictions imposed to contain the spread of the coronavirus pandemic. BDO’s employment index registered its first uptick – albeit slight, on a monthly basis, improving to 107.68 during February from 107.64 in January.
On a worrying note, however, the situation continues to be grim for the UK’s manufacturing sector with business confidence dipping 0.27 points lower in February to 83.99. Even amid hopes for economic recovery after the pandemic is brought under control, manufacturing firms face added pressures owing to Brexit related uncertainties and disruptions at the border after Britain officially departed from the EU.
// Index & Commodity Analyst
Arslan Butt is our Lead Commodities and Indices Analyst.
Arslan is a professional market analyst and day trader. He holds an MBA in Behavioral Finance and is working towards his Ph.D.
Before joining FX Leaders Arslan served as a senior analyst in a major brokerage firm. Arslan is also an experienced instructor and public speaker.