–CIPS/Markit June Services PMI 54.4 Versus 55.4 in May
–Confidence Sees Sharpest Fall On Record
LONDON (MNI) – The UK CIPS/Markit PMI survey showed service sector
activity fell to a 10-month low in June, with the decline exceeding
analysts’ expectations.
Following a fall in the CIPS manufacturing index, and little change
in the construction index, the CIPS June data show the UK recovery
losing momentum.
The headline June services PMI came in at 54.4. down from 55.4 in
May, its lowest level since August 2009. Analysts’ median forecast was
the headline index would fall to 55.0 from the previous reading of 55.4.
The June Markit/CIPS UK manufacturing index fell back from its
15-year high, dropping to 57.5 from May’s peak at 58.0.
The survey showed service sector companies much less optimistic
about the future, with the confidence index falling to 64.0 from May’s
72.1. The fiscal tightening unveiled in the June 22 budget appears to
have hurt confidence.
Paul Smith, senior economist at Markit, said the 0.4% quarterly
rate of growth expected in Q2, which would match that in Q1, may well
turn out to be the peak in the UK’s recovery.
“Worrying signs for the UK service sector appeared in June as
growth slowed in response to another below par increase in new
business,” Smith said.
“Confidence declined to the greatest extent in fourteen years of
data collection in reaction to the government’s austere emergency
budget,” he added.
–London newsroom: + 44 207 862 7491; email: drobinson@marketnews.com
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