Details of the UK services and composite PMI reports 6 May 2015
- Prior 58.9
- New orders 59.0 vs 59.9 prior
- Composite 58.4 vs 58.1 exp. Prior 58.8. Revised to 58.7
- New orders 58.0 vs 59.2 prior
A welcome bounce back for our biggest sector, even with the drop back in new orders
Prices received fell to the lowest since Feb 2012 at 48.7 from 50.2. It's been highlighted by Reuters but needs to be taken in context with whatever the input price component is, and that's not been publicly shown. Update: The report says that input costs have risen and were mainly driven by increased wage costs, though the input index number still remains below the long run average. That's paints a mixed picture for inflation as higher wages will be offset by lower selling prices. It also puts a bit of a squeeze on margins. On the flip side, firms maybe in paying higher wages as they feel more confident about the future.
GBPUSD has recovered to 1.5190 where it's currently finding resistance ahead of 1.5200
The expansion in employment continues but has fallen to a four month low. That might start to have some bearing on the next jobs reports
Chris Williamson at Markit sees the BOE staying low for longer on the price outlook
"While the robust ratesof economic expansion and job creation signalled by the PMI surveys support the view that the next policy move at the Bank of England will be a rate rise, the lack of inflationary pressures and weakness in manufacturing and construction suggests policymakers will be in no rush to hike, meaning the first rate rise is unlikely to take place before the end of the year."
