HALISTER1: U.K. PMIs Near-Term Positive, Maintain Medium-Term Caution: HSBC

U.K. PMIs Near-Term Positive, Maintain Medium-Term Caution: HSBC

(Bloomberg) -- Broad-based rebound in U.K. PMIs is undoubtedly better news for near-term activity levels, although medium-term caution is appropriate given the prospects for an investment-driven slowdown, HSBC economist Elizabeth Martins writes in a client note.
  • PMIs do little to assuage HSBC’s longer-term concerns
    • HSBC’s central case remains a gradual investment-driven slowdown, although not resulting in recession
    • August numbers point to a stagnating, rather than contracting, economy
  • BOE package of measures may have contributed to improved sentiment
  • Composite PMI rose to highest level since March, with headline gains evident across three main indexes
    • Business expectations index, while up sharply, remains at one of the lowest levels in the last four years
    • Input prices continue to rise, with prices charged index also rising
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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Elizabeth Martins (HSBC Bank PLC)

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