• Prior 55.9
  • Manufacturing PMI 46.9 vs 48.0 expected
  • Prior 47.8
  • Composite PMI 53.9 vs 54.6 expected
  • Prior 54.9

Similar to the Eurozone economy, there is a contrast in the UK economy as well with manufacturing conditions keeping on the softer side while services activity is staying more solid. Overall, it points to a bit of slowing in growth but at least this continues to put aside worries about a recession. S&P Global notes that:

“The UK economy enjoyed another month of strong growth in May, with the expansion continuing to be driven by surging post-pandemic demand in the service sector, notably from consumers and for financial services, with hospitality activities buoyed further by the Coronation. The surveys are consistent with GDP rising 0.4% in the second quarter after a 0.1% rise in the first quarter.

“However, this growth spurt is driving renewed inflationary pressures, as service providers struggle to meet demand and hence not only offer higher wages to attract staff but also find themselves able to charge more for their services. “It's a different story in manufacturing, where spending is being diverted away from goods to services, and many companies are also winding down their inventories, exacerbating the downturn in demand and driving both output and prices lower.

“The UK is therefore seeing a tale of two economies, with the divergence between manufacturing and services posing difficulties for policymakers. However, it's the far larger service sector that will typically dictate policy, meaning these survey results are nothing but hawkish in suggesting the Bank of England

has more work to do to quash stubbornly high inflationary pressures in the services economy.”