UK business activity better than expected in March The latest S&P Global flash UK purchasing manager composite index fell to a two-month low of 59.7 in March from 59.9 in February. This was higher, however, that the 57.8 forecast by economists polled by Reuters. Growth was stronger than expected in the services sector, boosted by the removal of COVID-19 restrictions. But this was offset by a slowdown in manufacturing output, which fell to a five-month low as a result of supply shortages and rising inflationary pressures slowing demand. Chris Williamson, chief business economist at S&P Global, said the reopening of the British economy after pandemic restrictions had helped offset the drag from the conflict in Ukraine, Brexit and rising prices. However, he also warned of “potentially sharply slower growth in the coming months, accompanied by a further acceleration of inflation and a worsening cost of living crisis, which paints an unwelcome picture of ‘stagflation’ for the economy in the months ahead”.