I noticed an interesting point in the latest economic data for the United Kingdom. It seems that the UK’s GDP recovery continues to gain momentum — the composite PMI for the second month of the year reached 53.9 compared to 53.7 the previous month. This is the highest figure since spring 2024, which is quite indicative.

What’s curious here: the growth in the business activity index indicates business recovery, but simultaneously, the service sector is experiencing significant reductions in the workforce. The blame, as they say, is on higher taxes introduced by the Labour government. It turns out that economic growth is happening, but the labor market remains weak — a contradictory picture.

S&P Global experts are quite optimistic. The chief business economist says that the data points to a promising start to the year for the UK’s GDP. The Bank of England also seems to be encouraged by these signs of growth.

But there’s a nuance. Price pressures remain relatively moderate, and concerns about the weakness of the labor market do not disappear. This could mean that regulators will continue to consider further interest rate cuts. It will be interesting to see how the UK’s GDP situation develops in the coming months — it appears the economy is in a transitional period between recovery and structural challenges.