According to the company’s UK Recovery Tracker, the number of sectors reporting output growth rose from 10 to 12 out of 14 in March – eight of which saw faster month-on-month output growth, four more than February.
Tourism and recreation, which includes pubs, hotels, restaurants and leisure facilities, posted the fastest growth of any sector in March, with a reading of 68.5 compared to 58.8 in February. A reading above 50 signals output is rising, while a reading below 50 indicates contraction.
The sector’s activity was said to have been bolstered by holidaymakers booking more trips abroad following the easing of travel restrictions and an increase in city-centre footfall.
However, cost inflation rose across the economy for the third month running in March, with the Tracker’s Input Price Index registering a reading of 82.2 for the UK, its second-highest on record and only lower than the out-turn recorded last November.
UK companies also raised their prices at an "unprecedented rate" for a second month in a row in March, with the Tracker’s Prices Charged Index increasing by three points from February to 68.3.
Jeavon Lolay, head of economics and market insight at Lloyds Bank Commercial Banking, said while demand for travel remains "buoyant", a recent wave of Covid-19 infections has caused "major disruption" to travel plans.
"The Tracker shows that more businesses are raising prices, likely as a direct effort to help offset higher input costs," Lolay added. "All eyes will be on how sustained and widespread this trend will be in the months to come."
"The Bank of England has already presided over three consecutive rate rises in recent months and faces a difficult decision next month with spiralling inflation coinciding with a less favourable outlook for growth."
