Britain’s businesses are banking on vaccines to deliver them from a double-dip Covid-19 recession, according to the first snapshot of the painful economic impact of England’s four-week lockdown. Encouraging news from Pfizer, Moderna and AstraZeneca came too late to prevent the tough new restrictions imposed in early November from taking their toll on large chunks of service sector output, according to a survey of the services and manufacturing sectors. But the monthly purchasing managers’ index from IHS Markit and Cips – the Chartered Institute of Procurement & Supply – also found that companies were more upbeat about their prospects over the next 12 months than at any time since 2015. The closely watched PMI showed activity dropping from 52.1 to 47.4 points between October and November – the steepest fall since May – as England’s tiered system of restrictions was replaced by a second national lockdown, with tough measures also in place in Wales and Scotland. A reading below 50 indicates that the economy is contracting. Andy Haldane, chief economist at the Bank of England, said that when they looked backwards, those responding to the PMI survey were “quite gloomy” – but said expectations of activity in the future had picked up, in part due to vaccine breakthroughs. “Overall that’s a positive picture,” Haldane said. He added that the vaccine news had been better than the Bank had envisaged when it produced its latest forecasts for the economy earlier this month. “I’d say on balance that news has been to the positive side of our assumptions in November,” Haldane told the House of Commons Treasury committee. The flash PMI, however, brought an end to the period of expansion that followed the lifting of restrictions after the first wave of the pandemic. In an echo of the impact of the nationwide curbs on activity in the spring, it reported steep downturns for restaurants, bars, hotels and other businesses heavily reliant on serving consumers face to face. The fall was smaller than economists had feared, and nowhere near as severe as in the spring, when the final PMI dropped to a record low of 13.8 in April. Even so, the 15.5% growth in the economy in the third quarter is expected to be followed by renewed contraction in the final three months of the year. Haldane said the Bank believed it would knock 3-4 percentage points off growth. A mini-boom for manufacturers stockpiling goods ahead of a possible no-deal Brexit spared the UK from a steeper fall in activity. While output in the service sector dipped from 51.4 in October to 45.6, growth picked up among UK factories from 55.8 to 56.3. The survey provided mixed news for the chancellor, Rishi Sunak, before the publication on Wednesday of spending plans for the next year. While the fresh setback to the economy threatens to lead to higher unemployment this winter, businesses are confident that vaccine breakthroughs have made the outlook brighter for 2021. Chris Williamson, chief business economist at IHS Markit, said: “A double dip is indicated by the November survey data, with lockdown measures once again causing business activity to collapse across large swaths of the economy. “As expected, hospitality businesses have been the hardest hit, with hotels, bars, restaurants and other consumer-facing service providers reporting the steepest downturns. “Some comfort comes from the data suggesting that the impact of the lockdown has not been as severe as in the spring, and manufacturing has also received a significant boost from inventory building and a surge in exports ahead of the UK’s departure from the EU at the end of the year, providing a fillip for many companies. However, while the lockdown will be temporary, so too will this pre-Brexit boost.” Samuel Tombs, UK economist for Pantheon, said the PMIs had recorded a further reduction in employment in November, suggesting that Sunak’s decision to extend the coronavirus job retention scheme until the end of March 2021 had done little to stem the flow of redundancies. “We continue to expect the unemployment rate to rise steadily to a peak of about 6.5% in the spring,” he added. The PMI for the eurozone showed a similar pattern to the UK, with tighter restrictions and lockdowns resulting in a drop from 50 in October to 45.1 in November. In the US, by contrast, the PMI rose from 56.3 to 57.9 – its highest level in five years.