Omicron spread hits economic growth
The spread of Omicron led to growth in the economy slowing to its lowest for nearly a year, according to early economic data.
The new figures for January show the rapid spread of the coronavirus variant weighed heavily on consumer activity in the run-up to Christmas – and produced the lowest growth figure since the country was in lockdown last spring.
The IHS Markit/CIPS flash report came in at 53.4 for January so far - reflected a further slowdown following the reading of 53.6 for December.
Scores above 50 represent growth, while anything below is a contraction – meaning the UK's private sector continued to expand but activity has slowed down.
Chris Williamson, chief business economist at commercial information provider IHS Markit, said: "Consumerfacing businesses have been hit hard by Omicron and manufacturers have reported a worrying weakening of order book growth."
The services industry saw the growth slow in January to 53.3 – down from 53.6 in December and the third month in a row the sector weakened.
Manufacturers also reported a slowdown in activity as new orders sank to their lowest since January 2021.
The survey also highlighted that cost inflation remained "stubbornly high".
Duncan Brock, group director at CIPS (Chartered Institute of Procurement & Supply), said: "What is also disappointing for the economy is price inflation returning with a vengeance – the second-highest jump in business expenses since 1998.
"Staff wages and energy price hikes made up the bulk of the extra burden this will inevitably be passed on to consumers."