The spread of the Omicron variant of coronavirus has hit UK hospitality and travel industries hard this month, bringing private sector growth to a 10-month low, a survey showed ahead of the Bank of England's policy announcement on Thursday.

In December, the preliminary "flash" IHS Markit/CIPS UK Composite Purchasing Managers' Index (PMI) fell to 53.2 from 57.6 in November.

The survey revealed slower growth in new orders and pricing pressures, which will have been observed by the BoE's rate-setters who had access to the PMI ahead of their December policy decision.

Global inflation has risen this year as a result of increasing energy prices and COVID-related supply-chain bottlenecks. In the UK, post-Brexit trade and migration hurdles have added to the problems.

CBI: UK economy to grow 8.2 per cent this year in return to pre-Covid level

The BoE has stated that interest rates will almost certainly need to rise in order to reduce inflationary pressures, but it delayed a widely anticipated move last month owing to uncertainties about the impact of the end of the government's job furlough programme.

Data later indicated no impact on the labour market, but Thursday's PMI suggested that the Omicron variant and restrictions to slow its spread are now the major downside risk. The services PMI dropped drastically from 58.5 in November to 53.2 in December, its lowest level since February.  The survey's optimism index fell to a 14-month low.

"Concerns about long-term pandemic restrictions, as well as the resulting harm to business and consumer confidence, had a negative impact on growth projections for 2022," according to IHS Markit.

The factory PMI's output index increased from 52.7 in November to 53.3 in December, a four-month high, mainly to an improvement in supply chain issues that had persisted for over a year.