UK services PMI slows to four-month low

UK services PMI slows to four-month low

U.K. services sector’s expansion eased last month, hitting the lowest level in four months, according to Markit’s Purchasing Managers’ Index.

Services PMI slowed to 53.4 in June, down from 53.8 in May. Analysts had predicted a retreat to 53.6.  

Manufacturing PMI signaled a drop to 54.3 in June from a revised of 56.3 in May, while construction PMI slipped 54.8 in June, down from 56.0 in May.

Some analysts indicated that the slowdown in major sectors was due to June’s general elections and uncertainty about the outcome of Brexit talks.

“The slowdown in business activity growth in June was linked to a softer rise in incoming new work across the service economy. Moreover, the latest increase in new work was the weakest for nine months,” Markit said.

"Survey respondents commented on subdued business and consumer confidence, alongside some instances of delayed decision making around the election."

The three PMI reports suggested a growth rate of 0.4 percent in the second quarter, which would be twice the first quarter’s expansion, said IHS Markit economist Chris Williamson.

As of 09:02 GMT, the pound traded lower for a fourth straight session against its U.S. counterpart at 1.2897 from the session’s open at 1.2933.

Ahmed Mamdouh

Ahmed Mamdouh, Co-Founder and Head of English Fundamental Analysis at FXComment.com, with 7 years of experience in the financial markets. Mamdouh holds a Master’s Degree in Economics from The American University in Cairo and a Bachelor Degree in Economics from The Faculty of Economics and Political Science, Cairo University.

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