UK’s Service sector displayed signs of vulnerability in June, according to recent PMI readings. PMI Services reading was finalized at 53.7, a slight downturn from May’s 55.2, while Composite PMI eased to 52.8, down from 54.0 in May.
Tim Moore, Economics Director at S&P Global Market Intelligence, said, “The service sector showed renewed signs of fragility in June as rising interest rates and concerns about the UK economic outlook took their toll on customer demand.” He pointed out that business activity saw the slowest expansion in three months, and rate of new order growth slid further from the peak recorded in April.
Despite the tepid pace of activity, Moore observed that labor market conditions remained relatively buoyant. He highlighted that job creation reached a nine-month high, with an improvement in candidate availability enabling firms to fill vacancies and rebuild business capacity.
On the price front, service providers experienced deceleration in overall input price inflation. Business expenses climbed at the most modest pace since May 2021. Nonetheless, cost pressures ranked among the most substantial seen since the survey began in July 1996. Salary payments continued to surge across the board, offsetting the decline in fuel bills and energy prices. This situation underscores the ongoing challenge of inflationary pressures in the UK economy.
