We expected a downward correction to the UK's February flash PMI numbers, partly as a result of recent global concerns. Instead, the composite print remained at 53.3, matching last month's mark as the highest tally since September 2018. However, the result came from contrasting swings in services and manufacturing, with the former falling back 0.6 points to 53.3, while the latter jumped by 1.9 points to a 10-month high of 51.9.
The flash numbers always require some perspective, as they have become more important to the market, but they are also possibly becoming more volatile and misleading. The data of late have produced marked revisions between the flash and the final numbers reminiscent of the changes that were previously more typical of average m/m swings. Even so, the PMI data are consistent with GDP growth of no more than 0.2% in Q1.
Otherwise, a further factor may be the pick-up in output price inflation, which hit its highest mark since mid-2018. This rise also seems to hint that companies are more capable of passing on what they regard as higher operating costs, albeit with an accompanying signal of lower input costs, which implies wider profit margins.