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UK June final services PMI 52.1 vs. 51.2 prelim

Final Services PMI 52.1 vs. 51.2 prelim and 52.9 prior.Final Composite PMI 52.3 vs. 51.7 prelim and 53.0 prior.

Key findings:

UK Services Business Activity Index falls to seven-
month low.
Demand for services improves, but at relatively
soft pace.Confidence dips slightly amid general election
uncertainty.

Comment:

Joe Hayes, Principal Economist at S&P Global Market
Intelligence:

“We are seeing some evidence of a pre-general election
seize up across the UK services economy, with growth
in business activity slowing to a seven-month low in
June as the prospect of a change in government led to
the adoption of a “wait-and-see” approach by some,
restraining sales.”

“Nevertheless, we’re on track for another quarter of GDP
growth, according to Composite PMI data for the three
months to June, albeit one that will be less punchy than
the first quarter’s 0.7%.”

“Prices still continue to show a high degree of stickiness
across the UK service sector, although input cost
inflation once again trended lower in June. The direction
of travel here is encouraging for the Bank of England, but
our survey’s gauge of prices charged actually rose on the
month as some companies noted their pricing power was
strong enough to raise their fees.”

“While costs, mostly from wages, have been the major
driving force behind strong services inflation, the
recovery of the UK economy from it’s late-2023 lull adds
another dynamic for policymakers to consider should
stronger economic conditions motivate more companies
to raise their prices.”

This article was written by Giuseppe Dellamotta at www.forexlive.com.

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