The UK continues to grapple with the negative consequences of the COVID-19 pandemic. The weak UK composite PMI has a harmful effect on the country’s overall economic recovery.
Reportedly, the UK composite PMI dropped for the third month in a row. It fell to 55.3 in August from 59.2 in July, with the lowest reading recorded in February. A drop in the index has slowed down the economic revival. The country is facing a distinct lack of staff and materials. The current growth rate is slightly above the pre-pandemic level. However, experts at IHS Markit believe that the recovery is hampering despite the positive results logged in the second quarter.
"Despite COVID-19 containment measures easing to the lowest since the pandemic began, rising virus case numbers are deterring many forms of spending, notably by consumers, and have hit growth via worsening staff and supply shortages," Chris Williamson, a chief business economist at IHS Markit, said.
Companies are suffering a labor shortage owing to new self-isolation requirements. Currently, only vaccinated UK residents do not follow them, the rest have to work at home. "Some businesses are finding recruitment difficult. With supply chain disruptions also persisting inflationary pressures remain a concern for now despite the slowdown in CPI inflation in July," Lloyds Bank economist Rhys Herbert said.
