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UK business activity picked up in January but job cuts continued as cost inflation accelerated, according to a report pointing to a “wavyfationary environment”.

The S&P Global Flash UK PMI Composite Output Index, which tracks private sector activity, stood at a three-month high of 50.4 in December.

Economists told Reuters that the index would fall slightly below 50 points. Any reading above the 50 mark suggests that most businesses are reporting growth in activity.

Despite the increase in the composite index, the level of employment fell for the fourth month in a row according to the survey, with businesses often linking to cost pressures. S & P Global said that, outside of the pandemic period, the rate of job losses recorded by the PMI in the last two months was the highest since the global financial crisis in 2009.

Chris Williamson, Economist at S&P Global Market Intelligence, said the results of the survey “add to the slowdown in the UK economy and concerns about business prospects

He warned that the inflationary pressures that “dominate, point to an environment that is weak and provides a growing quandary policy for the Bank of England”.