Danni Hewson, AJ Bell financial analyst, comments on today’s Flash PMI figures:
“The latest flash PMI figures set the tone ahead of tomorrow’s interest rate decision by the Bank of England. Supply chains are still fraught, some materials are still hard to come by and delays are pushing some companies to try and buy ahead, at a premium. All those cost pressures will work their way through and signal an uncomfortably bumpy period where inflation will continue on its upward trajectory.
“Add in staffing shortages being felt by industries like hospitality and you have a recipe which will require businesses to weigh up whether it’s better to slim down provision or scale up wages. Of course, the end of the furlough scheme could solve that issue. No one really knows how many of those still being cushioned will return to their substantive posts or be looking for new ones.
“Those sitting round the table at Threadneedle street will also consider the fact that though there is still massive growth, the pace of recovery has slowed a little. Whether Freedom Day mark two makes any difference is a problem for another day. On this day expect the status quo, though the mood music might hint at what comes next.”
