UK Services PMI shoots up in October

I am always cautious about relying on PMI surveys, as they can give misleading readings, as we saw immediately after the EU vote. However, many other forecasters like them and use them. It will be interesting to see if they follow their logic through. Those who revised forecasts down sharply after the vote because the initial PMI figures were weak should presumably be revising them up substantially now they are strong. Today’s Services PMI came out at 54.5 for October compared to 52.6 for September. The overall whole economy PMI hit 54.6, up from 53.8 in September. These figures have to be below 50 to forecast a downturn.

I am sticking with my forecast of 2% growth this year, in line with the Treasury forecast in March. It is also difficult to see why many forecasters are still so pessimistic about 2017.

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24 Comments

  1. Antisthenes
    Posted November 3, 2016 at 11:53 am | Permalink

    The media and experts do have this annoying propensity toward believing one swallow makes a summer. As soon as some indicator or other is published that gives a snap shot of economic conditions for just one relatively short instance in time it is jumped upon by all and sundry (like soothsayers and shaman augurists)to be a portent of things to come. Many and varied are the judgements and assumptions made and pontificated upon based on them. Few ever particularly correct or helpful. I wish our pundits and experts would reserve judgement until more snap shots became available so that real trends could be ascertained. That way we are not tempted to take precipitous actions that because they are premature cause more harm than good.

  2. a-tracy
    Posted November 3, 2016 at 11:59 am | Permalink

    John, you must put a post on about this court judgement or people are going to combust!!

    If I were Guido Fawkes I would start selling masks today.

  3. rose
    Posted November 3, 2016 at 12:21 pm | Permalink

    So we have a remainiac judge in the High Court. What a surprise.

    “Thomas is one of the Founding Members of the European Law Institute, a non-profit organisation that conducts research, makes recommendations and provides practical guidance in the field of European legal development with a goal of enhancing the European legal integration.”

  4. CHRISTOPHER HOUSTON
    Posted November 3, 2016 at 12:36 pm | Permalink

    Somehow, the PMI figure for UK Services after the High Court decision effectively impeding Brexit is neither here nor there.
    A number of Remainers in Parliament and some powerful people outside have an absolute contempt for our people.
    Let us hope their unutterable hatred does not bring violence for that is where it appears to be heading as the channel of democracy has become a blocked mid-street open sewer.

  5. Denis Cooper
    Posted November 3, 2016 at 1:01 pm | Permalink

    I keep reading in the media that if it loses its appeal to the Supreme Court in December then the government will have to give MPs a vote on whether to activate Article 50.

    That is wrong, because the case centred on alleged infringement of the sovereignty of PARLIAMENT, not just the Commons.

    Moreover rather than just a motion to be passed by MPs alone, or even by both MPs and the unelected legislators-for-life in the Lords, it will be necessary to get a Bill through both chambers with the normal multi-stage process.

    There is an argument that the government should not waste more time on an appeal to the Supreme Court with a good chance that it will lose again, but instead should start the Bill in the Commons as soon as possible. It need not be the planned “Great Repeal Bill”, which could come later, it could be just a short Bill authorising the government to serve the Article 50 notice “notwithstanding the European Communities Act 1972”.

    It has been made clear that there can be no negotiations until the Article 50 notice has been served, in effect therefore the Lords could stop the whole process in its tracks, and the sooner that is sorted out the better.

  6. James Winfield
    Posted November 3, 2016 at 1:16 pm | Permalink

    Amazing how you suddenly write posts about them when in July you were shunning them!

    • zorro
      Posted November 3, 2016 at 7:42 pm | Permalink

      Not really – the one in July certainly looked suspect so why not refer to them more generally (the last couple anyway)? Is it because they don’t reflect the Remain fantasy of economic failure once the Brexit vote happened?

      zorro

  7. Sir Joe Soap
    Posted November 3, 2016 at 1:34 pm | Permalink

    Establishment kick back by judges then?
    This will end badly unless people like this start taking what the majority want a little more seriously.

    • zorro
      Posted November 3, 2016 at 7:45 pm | Permalink

      It is as if they are ignoring what they debated ad infinitum in the Referendum Act period, and the very clear instruction that the government WOULD implement the result as it had the mandate of the people. If the result had been via constituenct first past the post, leave would have swamped it! Cameron stating quite clearly that he would invoke A50 the next day….. Can’t get clearer than that!

      zorro

      • Sir Joe Soap
        Posted November 4, 2016 at 12:13 pm | Permalink

        Cameron should have been hauled in front of an inquiry for that alone… why wasn’t that done?

    • Anonymous
      Posted November 4, 2016 at 12:02 am | Permalink

      MPs voted by 6:1 to have a referendum and abide by the result. What constitutional issue ?

      If it does go back to Parliament then MPs must vote in accordance with their constituents in the referendum. If they cannot then they must resign as they will be telling their voters what to do rather than representing them.

      Therefore the result should be a ratification of Brexit by 421 out of 574 constituencies.

      Can you imagine if the reverse had happened and Remainers had their decision blocked by High Court judges and rich financiers ? There would be blood in the streets by now.

  8. Mark B
    Posted November 3, 2016 at 1:35 pm | Permalink

    They are historic and not indicators of what is to come.

  9. The PrangWizard
    Posted November 3, 2016 at 1:47 pm | Permalink

    Just heard the news from the High Court about Brexit.

    Leaving was going to be so easy wasn’t it, we were told?

    Just trigger Article 50 etc., etc..

    Reminds me that we were told it would be easy to get justice for England with EVEL. That went well too didn’t it?

    We need leaders who are as streetwise and ruthless as their opponents. Will we ever get out now? I lost faith a while back in that, and I fear my instincts may be correct, again.

    Time to take to the streets, methinks.

  10. Richard1
    Posted November 3, 2016 at 2:47 pm | Permalink

    We are informed that Mr Hammond expects 0.8% GDP growth in 2017 vs 2.5% had we voted to remain in the EU. What do you forecast for ’17?

    Reply 2.2% as I forecast pre the vote as well

    • Lifelogic
      Posted November 4, 2016 at 7:19 am | Permalink

      Hammond could do a lot to promote growth by undoing all the countless Osborne tax increases and tax complexity increases, scrapping all the grants for green lunacies, scrapping his wage controls and moving to a sensible and simpler level of taxation.

      Then cutting out all the endless government waste.

      He could also help lighten the load on the NHS by getting rid of Osborne’s 10% Heath IPT tax and by restoring full income tax relief.

  11. Oggy
    Posted November 3, 2016 at 2:57 pm | Permalink

    So the Courts are telling the Government how to run the country – nice !

    Regardless of what the campaigners say it is obviously a cynical attempt to undermine democracy by a few individuals who have their own interests at heart. They all keep saying ‘Parliament is Sovereign’ – I disagree – it’s the people who are Sovereign and we voted to leave.
    Mrs May is now struggling with this, ONLY because she dithered about triggering A50, if she had triggered this straight away all this would have been avoided.

    She who hesitates is lost.
    I can feel a General Election coming on.

  12. NoMoreEU
    Posted November 3, 2016 at 6:42 pm | Permalink

    I previously wrote that I was very concerned (like many others) that Theresa May’s delays (and the vacuum she had created) had allowed the Remainers to regroup and to fill the vacuum with their ‘hot air’.

    Things are now much worse, and the vacuum has been filled by an exploding petard of Mrs May’s own making.

    I feared the Government were not setting the agenda and were on the back foot.
    Now May has gone from back foot, to flat on the floor!

    The PM has been completely outplayed because of her inaction.

    Get a grip now Mrs May!

    Announce plans, to clear the way for an Election, to take place as soon as possible.

    Get the majority we need, in Parliament, to implement the will of the people.
    Then get on with it!

  13. John Robertson
    Posted November 3, 2016 at 7:10 pm | Permalink

    Court Decision

    “If you know the enemy and know yourself you need not fear the results of a hundred battles.” Sun Tzu

    At the moment the remoaners are 1 block army. Give them this debate in parliament and a vote, they become a much smaller block.

    As apharently some one once said, you need not fear the results of a hundred battles.

  14. Ed Mahony
    Posted November 3, 2016 at 9:26 pm | Permalink

    David Cameron is ultimately to blame for the chaos we now find ourselves in. The court ruling is a disaster.
    If only Cameron had waited until we had paid off more of our national debt and encouraged and helped our companies to be ready to export more, then, and only then, go for the referendum.
    Cameron isn’t the only one to blame though – both (some) Brexiteers (with an aggressive, arrogant kind of patriotism) and (some) Remainers (for not listening to ordinary people) are as well – but Cameron mainly.
    What a bloody mess our country is now in – constitutionally, politically, culturally (all the horrible, nasty racism/xenophobia) and no doubt, economically, at least in the short to medium term), as well as problems ahead in Ireland, with Gibraltar, possibly with Scotland, and more.

    • Ed Mahony
      Posted November 3, 2016 at 9:30 pm | Permalink

      (and yet, the horrible irony of wanting to ‘get back control’ of our laws is that our legal system here doesn’t seem to want them back, they’re more comfortable being in the EU)

  15. WildDog
    Posted November 3, 2016 at 9:27 pm | Permalink

    People in the UK and other liberal democracies don’t get it how dictators gain traction. It is when that Law under which people have happily lived turns on them like a demented family pet.
    The Law-Dog is now in his kennel. He has bitten once. If he bites again in December 2016

  16. TolpuddleTomato
    Posted November 4, 2016 at 1:01 am | Permalink

    Orgreave:

    The young Labour MPs do not quite know the full history, in on-the-spot intimate detail, of the Coalminers strike prior and during Orgreave.. If they did, they would not be so very keen on a public enquiry. They would be well advised, with an admission that the police did not always behave as properly as some would wish, to let it pass into the history of “gallant workingclass struggles for justice” and other youth-motivating and idealistic chants and slogans.
    The whole public good would not be served by an exhaustive enquiry. It would reveal the good, the bad and the very ugly indeed. It would not “enhance the human spirit” as some would say is the definition of literature as opposed to just a book.

  17. ChrisS
    Posted November 4, 2016 at 2:23 am | Permalink

    Another fine mess that Cameron is responsible for.

    He should have declared Article 50 on 24th June as he so very clearly promised he would during the referendum campaign. I cannot see how judges could have challenged it immediately after achieving a 17m mandate.

    As a result, are you now preparing for an election in February or early March ?

    If the Supreme Court confirms the opinion handed down yesterday, it seems to me that Mrs May will have little choice other than to seek her own mandate to handle Brexit as she sees fit. Anything else will be seen as weak, cowardly even.

    Only if Mrs May achieves a larger majority will the Remoaners in both houses allow the necessary legislation to pass without strings attached.

    All except Clarke and Soubry, of course, if they aren’t deselected by their constituency associations first.

    It will be the most unpredictable election, ever.

    If Labour MPs force Corbyn to fight it on a Remain ticket, or his own preference for a so-called “soft Brexit”, allowing FOM to continue, he could come close to seeing the party wiped out in the North and in Wales. We could see a lot more LibDem MPs elected elsewhere as they will fight it on a strong Remain ticket but they will take nowhere near enough seats from the Conservatives to deny her a resounding win.

    Although Mrs May will try to fight the campaign on a much wider platform, inevitably it will end up being fought primarily on Brexit.

    reply I am not expecting an election. Either the Supreme Court or the Commons will authorise the letter.

  18. acorn
    Posted November 4, 2016 at 7:14 am | Permalink

    Words like clutching and straws come to mind.

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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