By Ian McConnell
THE tourism and recreation category, which includes pubs, hotels, restaurants, leisure facilities and travel agents, was last month the fastest-growing UK sector for the first time in more than nine years, a survey shows.
The latest Lloyds Bank UK recovery tracker registered a reading of 62.2 for the tourism and recreation sector. A reading of more than 50 signals output is rising, while a figure below 50 indicates contraction.
Ten out of 14 sectors reported output growth in September, up from nine in August, Lloyds noted.
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However, manufacturing output contracted. And the rate of input-cost inflation across the economy during September was the second-highest in the tracker’s history, “as energy prices spiked and demand for labour intensified”, Lloyds noted.
It added: “This led all 14 UK sectors monitored by the tracker to raise their prices, with transport operators and manufacturers of chemicals, food and drink, industrial goods, and metals and mining products recording the sharpest month-on-month increases.”
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The bank said of the tourism and recreation sector: “The sector benefited from strong consumer demand for large-scale events, such as concerts and music festivals, and the easing and simplification of international travel rules in England – which led to a rise in people booking holidays abroad and more tourists visiting the UK.”
The survey also showed UK transport operators benefited from a loosening of travel restrictions and an increase in the number of people commuting, causing the sector’s output to rebound sharply month-on-month. The output reading for this sector jumped to 55.9 in September, from 42.9 in August.
Jeavon Lolay, head of economics and market insight in Lloyds’ commercial banking division, said: “While the number of sectors in growth mode increased last month, we are now firmly in an economic phase of recovery where big leaps in activity won’t happen every month. Tourism and recreation outpaced other sectors in September because it continues to benefit from relaxations in Covid-19 restrictions and resurgent consumer demand.”
He added: “As the UK economy continues to inch towards its pre-pandemic peak, logistical challenges, higher energy prices and uncertainty relating to the path of the virus as we head into winter are key risks. Policymakers will need to tread carefully in order to safeguard the recovery, with important fiscal and monetary policy decisions due in the coming weeks and months.”
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