Growth in British economic activity slowed to an 11-month low in January, a closely watched survey showed, as consumer services came under pressure due to a high number of coronavirus infections.

The IHS Markit/Cips UK composite purchasing managers’ index (PMI), which measures the health of manufacturing and services activity, fell to 53.4 in January from 53.6 the previous month.

The reading was below a forecast of 55 by economists polled by Reuters and was the lowest since February 2021, when the country was still under strict Covid-19 restrictions.

Gabriella Dickens, an economist at consultancy Pantheon Macroeconomics, said the January data showed that ” Omicron variant continue to affect activity in the first half of the month.”

Dickens added that the purchasing managers’ index, based on interviews conducted between Jan. 12 and 20, was in line with her forecast for a further small monthly decline in gross domestic product after an expected contraction in December.

However, ING economist James Smith noted that the “smaller drop in PMI compared to past Covid waves” suggested that “the cumulative impact of Omicron on UK monthly GDP will be less than 1%”.

Dickens warned that weak January data will not prevent the Bank of England’s Monetary Policy Committee from raising interest rates. Rates for next week’s meeting, especially given the ongoing price pressure.

After peaking last November, the economy-wide PMI sub-index of input costs rose at the second-fastest pace on record in 1998, reflecting rising energy costs and worker wages, the report said.

The MPC “has no choice but to raise rates again to contain price pressures and anchor inflation expectations,” Dickens said.

Manufacturing outperformed services, the survey showed, as the latter bore the brunt of a new wave of Covid-19 infections, forcing many to self-isolate or avoid crowded places until the end of last year.

“Consumer-facing businesses have been hit hard by Omicron,” while others “remain encouragingly strong,” said Chris Williamson, chief business economist at IHS Markit.

In stark contrast to a slump in economic activity in January, a continued rebound in materials supplies led to the fastest rise in UK manufacturing output since August.

Unlike the services sector, factories also reported a slowdown in input prices as supply chain disruptions eased and raw material costs fell.

Businesses in both the manufacturing and services sectors reported increased staff absenteeism, capacity constraints and work backlogs due to the pandemic, the report said.

Some forward-looking indicators were more upbeat than January’s output data. Business expectations for the year ahead, for example, are the most optimistic since the summer, with respondents saying easing of pandemic restrictions and strong forecasts of customer demand have helped boost their confidence.

Adam Hoyes, an economist at research firm Capital Economics, said that while the PMI showed the UK economy was still suffering from “the hangover from the surge in Omicron cases”, “we still think GDP will recover fairly quickly for the remainder of the first quarter” .