Hotels and restaurants bounce back from Brexit

The Markit/CIPS purchasing managers’ index showed that the UK’s services sector, which includes restaurants and hotels, recorded the biggest month-on-month increase in the survey’s 20-year history.

The index rose from 47.4 in July to 52.9 in August. Any score above 50 indicates growth.

It comes after hotels anticipated a ‘record breaking’ summer season,​ with the number of people taking UK-based staycations set to reach a new high in August.

The report linked the growth to rising domestic tourism driven by the weakened pound following the Brexit vote.

‘Buck Brexit’​

Chris Williamson, chief business economist at HIS Markit, which compiled the survey, said: “Many companies are seeing business return to normal either simply by customer confidence rising or a stoic determination to ‘Buck Brexit’ and carry on regardless.”

However, business confidence among restaurants and hotels was still at one of its lowest levels for four years, suggesting growth could become subdued in the coming months.

David Noble, group chief executive officer at CIPS, said: “Whether this steadiness continues will largely depend on the sector’s reaction to the UK Government’s approach to the Brexit negotiations as the sector keeps one eye on business as usual and one eye on possible obstacles ahead.”

Hotels, restaurants, computing and IT, and financial services contributed to the recovery in growth, according to the study.