UK Markit/CIPS January services PMI 53.0 vs 54.1 exp
UK Markit/CIPS January services PMI data now out 5 Feb
- 54.2 prev
- composite PMI 53.5 vs 54.6 exp vs 54.9 prev
Headline data posts a 16-month low,
Soggy reading sees GBPUSD down to 1.4122 and EURGBP up to 0.8828 with GBPJPY 155.16. Bids/support in to 1.4100 and 154.80-155.00 with sellers/offers around 0.8835 to keep in mind.
- January data pointed to a slowdown in growth of services activity across the UK, which stemmed from relatively weak gains in new work. Job creation nonetheless picked up as companies retained positive expectations surrounding the outlook.
- Although the latest results revealed an easing of inflationary pressures, rates of increase in both input costs and output charges remained above their long-run trends.
Chief economist Chris Williamson says:
"The pace of UK economic growth slowed sharply at the start of the year as January saw a triple whammy of weaker PMI surveys. Service sector expansion slid to a 16-month low, reflecting a marked waning in growth of demand for business and consumer-facing services such as hotels and restaurants. Demand for transport and communication services was down for the second straight month.
"The January slowdown pushes the all-sector PMI into dovish territory as far as Bank of England monetary policy is concerned, historically consistent with a loosening bias. With the survey also indicating weaker upward price pressures, the data therefore cast doubts on any imminent rise in interest rates.