‘Given the deterioration in the forward-looking indicators, such as business optimism and order book growth, the risks are tilted towards the economy slowing in the third quarter.’ – Chris Williamson, IHS Markit
Services sector activity in the UK fell more than expected in June amid rising uncertainty surrounding the Brexit negotiations. Markit reported on Wednesday that its Purchasing Managers’ Index for Britain’s services sector declined to 53.4 in June, compared to the preceding month’s 53.8 points. The weaker-than-expected figures added to evidence that the country’s economic expansion started to fade, following the disappointing PMI reports on the UK construction and manufacturing sector. Moreover, survey showed that the amount of new orders grew at the slowest pace in nine months, while business confidence registered the second-weakest reading since December 2011. However, experts suggested that there were some gains, notably in business services and financial services, but in general, investment, exports and business spending failed to provide a sufficient boost to fully offset a slowdown in consumption. In contrast, the labour market registered its fastest pace of job creation in 14 months, while companies faced difficulties of recruiting new staff.
