# UK economic growth slowed again in August as post-lockdown shortages bite – PMI
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2021-08-23
Category: BUSINESS
Category URL: https://financedigest.com/category/business
Meta Title: UK Economic Bounce-Back Slows in August
Meta Description: Survey shows post-lockdown growth loses momentum with shortages of staff and materials. Inflation pressures cool slightly, but recovery falters.
URL: https://financedigest.com/uk-economic-growth-slowed-again-in-august-as-post-lockdown-shortages-bite-pmihtml

![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2021-08-23t083848z1lynxmpeh7m0byrtroptp4britain-economy-pmi-1736837989434-compressed.jpg)

LONDON (Reuters) – Britain’s post-lockdown economic bounce-back slowed sharply in August as companies struggled with unprecedented shortages of staff and materials, but strong inflation pressures cooled a bit, a survey showed on Monday.

The IHS Markit/CIPS flash composite PMI dropped for the third month in a row, sinking to 55.3 from 59.2 in July, its lowest since February and a sharper fall than a median forecast of 58.4 in a Reuters poll of economists.

The pace of growth was slightly above the pre-pandemic average but “there are clear signs of the recovery losing momentum in the third quarter after a buoyant second quarter”, said Chris Williamson, chief business economist at IHS Markit.

Despite COVID-19 containment [measures easing](https://www.financedigest.com/factbox-government-measures-to-ease-inflation-pain-2.html "Factbox-Government measures to ease inflation pain") 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.

Companies have complained that self-isolation requirements for contacts of people with [COVID-19 have made it hard for them to find enough staff](https://www.financedigest.com/qantas-idles-2500-more-staff-as-covid-19-cuts-domestic-flights.html "Qantas idles 2,500 more staff as COVID-19 cuts domestic flights") but those requirements were dropped from Aug. 13 for people who have had two vaccinations.

On a brighter note, a measure of employment [hit a record](https://www.financedigest.com/londons-ftse-100-hits-fresh-record-high-as-telecoms-surge.html "London’s FTSE 100 hits fresh record high as telecoms surge") high as furloughed workers return to their jobs and businesses were more optimistic about future output.

A gauge of input [prices fell after hitting a more than 20-year high in July and the prices charged by factories moved further away from June’s record](https://www.financedigest.com/world-food-prices-hit-record-high-in-2022.html "World food prices hit record high in 2022") high.

The Bank of England is watching to [see whether a jump in inflation turns into more stubborn price growth](https://www.financedigest.com/wto-sees-subpar-2023-trade-growth-with-multiple-risks.html "WTO sees “subpar” 2023 trade growth with multiple risks").

The BoE said [earlier this month it expected](https://www.financedigest.com/portuguese-airline-tap-swings-to-profit-earlier-than-expected.html "Portuguese airline TAP swings to profit earlier than expected") “modest monetary tightening” would be needed over its three-year forecast period.

The fall in the [PMI was mostly driven by services firms who make up the bulk of Britain’s economy](https://www.financedigest.com/uk-factories-suffer-worst-month-since-may-2020-as-economy-stumbles-pmi.html "UK factories suffer worst month since May 2020 as economy stumbles – PMI"). Manufacturing dipped only slightly although automotive and electrical goods [production fell into decline](https://www.financedigest.com/roche-flags-2023-earnings-decline-on-slump-in-covid-products.html "Roche flags 2023 earnings decline on slump in COVID products") due mainly due to supply constraints.

[Data for the survey](https://www.financedigest.com/survey-data-28-brits-say-brexit-sped-decision-buy-uk-holiday-home-year.html "Survey Data: 28% of Brits Say Brexit Has Sped Up Their Decision to Buy a UK Holiday Home This Year") was collected between Aug. 12 and Aug. 19.

(Reporting by William Schomberg; Editing by Catherine Evans)


---
This blog is powered by Superblog. Visit https://superblog.ai to know more.
---