The UK’s tourism and recreation sector – which includes pubs, hotels and restaurants – saw output grow slightly in December, thanks in part to fans watching the football World Cup.
It scored a reading of 50.2, compared to 44.6 in November, according to the Lloyds Bank UK Sector Tracker.
A reading above 50 on the tracker indicates expansion, while a reading below 50 indicates contraction.
Seven of the 14 economic sectors monitored by the tracker reported output growth – compared to versus three in November – the highest number since June 2022.
However, overall UK economic activity saw a slight decline, with a reading of 49, compared to 48.2 in November.
Software services firms (56.8) and automotive manufacturers (53.1) posted the fastest rises in activity. Other sectors showing growth in output were real estate (52.3), industrial goods manufacturing (50.3), industrial services (50.8) and technology equipment manufacturing (52.9).
The figures for December also showed that inflationary pressures are easing “which in turn could feed through to a slowdown in the increase in prices charged to consumers”, said the bank.
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Jeavon Lolay, head of economics and market insight at Lloyds Bank Corporate and Institutional Banking, said: “While the economy held up better than expected in recent months, the impact of temporary boosts such as the World Cup and first Covid-19 restriction-free Christmas for three years is evident.
“The mixed performance across UK sectors is likely to remain a rolling theme in 2023 as the strains from rising prices and higher interest rates impact both households and firms disproportionately.
“Still, further evidence of a broad softening of inflationary headwinds is welcome, as in large part this reflects the continuing normalisation of supply chain conditions for many sectors.
“The other key dynamic to note in our report is the continuing strength of salary demands, which, if sustained, will keep underlying price pressures elevated.”
Scott Barton, managing director at Lloyds Bank Corporate and Institutional Banking, added: “Despite December data showing a marginal increase in activity in some sectors, this month’s broader data illustrates that the current trading environment remains fragile.”
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