HomeLive CommentsUK PMI composite fell to 31-mth low, inflation fight carries a heavy...

UK PMI composite fell to 31-mth low, inflation fight carries a heavy cost

UK PMI Manufacturing fell from 45.3 to 41.5 in August, a 39-month low, and missed expectation of 45.1. PMI Services fell from 51.5 to 48.7, a 7-month low, below expectation of 50.8. PMI Composite fell from 50.8 to 47.9, a 31-month low, and first contraction since January.

Chris Williamson, S&P Global Market Intelligence’s Chief Business Economist, commented on the data’s implications: “The early PMI survey for August suggests that inflation should moderate further in the months ahead, but also indicates that the fight against inflation is carrying a heavy cost in terms of heightened recession risks.

The numbers tell a story of a stalling economy. The service sector’s earlier signs of rejuvenation are waning, and the manufacturing sector’s decline is becoming more pronounced. Williamson added that the data suggests a -0.2% contraction in GDP for Q3.”

He also alluded to the broader monetary implications, noting, “While a further hike in interest rates in September looks to be on the cards, the August PMI data will add to speculation that rates could soon peak.”

Full UK PMI release here.

Featured Analysis

Learn Forex Trading