UK PMI Services was finalized at 47.1 in June, sharply higher from May’s 29.0. PMI Composite rose to 47.7, also sharply higher from May’s 30.0, hitting a four-month high.

Tim Moore, Economics Director at IHS Markit:

“June data highlights that the worst phase of the service sector downturn has passed as more businesses start to reopen and adapt their operations to meet social distancing requirements. The proportion of service providers reporting a drop in business activity has progressively eased after reaching a peak of 79% in April. Around 33% of the survey panel signalled a reduction in business activity during June, which compared with 54% in May.

“Encouragingly, more than one-in-four service providers reported an expansion of new business during June, which was commonly attributed to pent up demand and the phased restart of the UK economy. However, lockdown measures continued to hold back travel and leisure, while companies across all main categories of service activity commented on subdued underlying business and consumer spending in the wake of the COVID-19 pandemic.

“The latest UK Services PMI data highlighted another steep decline in employment numbers, despite a rebound in business expectations for the year ahead. Service providers widely commented on fears of a slow recovery in customer demand and an immediate need to reduce overheads. Moreover, survey respondents often noted the high cost of adapting operations during the COVID-19 pandemic, coupled with constrained business capacity and difficulties passing on rising expenses to clients.”

Full release here.

UK Gfk Consumer Confidence rose to -27 in July’s flash reading, up from June’s -30. General Economic Situation over the next 12 months also improved to -42, up from -48.

“After the recent near-historic low of -36 for the Consumer Confidence Barometer last month, we’re seeing some early signs of improvement across most measures for our fourth COVID-19 flash, even though all our core scores remain negative… Economic headwinds could easily blow any recovery off-course with confidence remaining fragile and volatile amid few signs of stability.”.

Full release here.

UK PMI Manufacturing was finalized at 50.1 in June, up from May’s 40.7. The 9.4 pts month-on-month rise was the largest on record. But the headline reading indicates a stabilization only, not marked improvement. Also, employment fell for the fifth successive month.

Rob Dobson, Director at IHS Markit: “June completed a marked turnaround in momentum in UK manufacturing… The planned loosening in COVID-19 restrictions on the 4th July should aid further gains in coming months. Although the trend in new export business remains weak, that should also strengthen as global lockdowns and transport constraints ease further.

“The main focus is now shifting towards the labour market. Concerns are rising about the potential for marked job losses, especially once the phase out of government support schemes begins. The news on that footing is less positive, with June seeing a further reduction in staffing levels and, although easing sharply since April’s record, the rate of job loss remains among the steepest in the 29-year survey history. Economic conditions will need to improve markedly across the UK, or some support retained, if the labour market downturn is to avoid becoming more entrenched through the remainder of the year.”

Full release here.