Business confidence softened more than expected in all sectors in January. The Construction PMI registered the biggest drop (-2 points to 50.2), followed by the Services PMI (-1.2 points to 53.0) and the Manufacturing PMI (-1 point to 55.3). While the Construction PMI suggests almost stagnating activity in a context of contracting production since three consecutive quarters, a level well above 50.0 in the Services and Manufacturing PMIs indicate further acceleration, albeit at a slower pace. We are still at an early stage of Q1, but the confidence levels in those two key sectors of the economy suggest GDP growth of +0.3% q/q in Q1. The global outlook should continue to provide positive support to UK companies against the backdrop of slower domestic demand. However, price pressures remain strong and companies face a ‘lower profitability and high indebtedness’ issue. Overall, business insolvencies increased by +9.9% y/y in Q4. Bankruptcy data per sector are available only for Q3 as yet, showing that accommodation and restaurants, transportation and storage, information and communication, manufacturing, construction and trade were the most impacted sectors.