Skirting recession: S&P Global found ‘signs of renewed momentum’ in the UK
Britain is set to avoid recession but the downturn is deepening in Germany and France.
In a series of health checks on European economies, S&P Global found ‘signs of renewed momentum’ in the UK.
But it also warned of a ‘sluggish start to the year’ in Germany and a ‘depressing’ picture in France where ‘the economy is kicking off 2024 on a slow note’.
James Smith, an economist at banking group ING, said: ‘Unlike the eurozone, the UK is picking up steam.
‘This is another signal that the consensus among economists going into this year, which suggests the UK will under-perform most major European economies in 2024, looks a bit too gloomy.’
S&P Global said its index of activity in the UK private sector, where scores above 50 show growth and scores below show decline, rose to a seven-month high of 52.5 in January.
Chris Williamson, an economist at S&P, said it showed Britain was ‘skirting recession’. Germany clocked up 47.1 on the index– the weakest for three months – and France hit a four-month low of 44.2.
Cyrus de la Rubia, chief economist at Hamburg Commercial Bank, which compiled the reports with S&P, said that, having seen the German economy shrink last year, the update pointed to ‘a continuation of the recession’.
On France, S&P said: ‘France began the year with another marked month-on month reduction in private sector business activity. The downturn worsened in January.’
S&P said the crisis in the Red Sea, where attacks by Houthi rebels on ships have hit trade, has hurt Europe.
Signs of a UK recovery will be welcomed by the Tory leadership who hope tax cuts, falling inflation and lower interest rates will boost the economy ahead of the election.
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