UK PMI Services was finalized at 55.0 in April, marking a significant improvement from March’s 53.1 and representing the highest level since May 2023. This level of activity, the highest since May 2023, signals robust growth in the sector, with activity and new work rising at the fastest rates in 11 months. Despite these positive developments, input cost inflation remains high, reaching its peak since August 2023, though the rate of staff hiring continues to be subdued.

Tim Moore, Economics Director at S&P Global Market Intelligence, highlighted that the latest survey results suggest the UK economy is growing at a quarterly rate of 0.4%. He noted, “Prices charged inflation across the service sector eased to a three-year low in April, suggesting that the pass-through of higher costs has started to wane.” This slowdown in price increases comes despite a sharp rise in business expenses driven by strong wage inflation, which continues to push up operating costs.

Full UK PMI services final release here.

UK PMI Services was finalized at 53.1 in March, down from February’s 53.8. PMI Composite was finalized at 52.8, down from prior month’s 53.0.

Tim Moore, Economics Director at S&P Global Market Intelligence, said, “The solid growth rate achieved in March reinforces the view that a rebound in service sector performance is helping the UK economy to pull out of last year’s shallow recession.”

Meanwhile, Input prices have continued to rise sharply, with inflation rates only slightly below their six-month average. The primary factors contributing to the uptick in input costs include higher salary payments and increased transportation bills.

The rate at which prices charged by service providers have increased slowed to its lowest point since September 2023. Despite this deceleration, the index remains well above its long-term trend, signaling enduring inflationary pressures within the UK’s domestic economy.

Full UK PMI Services release here.

Scotland’s highest court of appealed ruled that UK Prime Minister Boris Johnson’s decision to suspend the parliament until October 13 was unlawful. Scottish National Party lawmaker Joanna Cherry, who led the challenge immediately called for parliament “to be recalled immediately”.

Johnson’s spokesman, on the other hand, said he has absolute respect for the independence of the judiciary. However, they’re still going to appeal the Scottish court’s ruling.

UK PMI construction rose sharply to 55.3 in June, up from May’s 28.9, well above expectation of 47.0. While new orders stabilized, employment fell again. Also, lack of materials availability pushed up input costs.

Tim Moore, Economics Director at IHS Markit: “As the first major part of the UK economy to begin a phased return to work, the strong rebound in construction activity provides hope to other sectors that have suffered through the lockdown period. While it has taken time for the construction supply chain to adapt and rebuild capacity after widespread business closures, there is now clear evidence that a return to growth has been achieved…

“…Looking ahead, construction firms are more confident than at any time since the start of the COVID-19 pandemic. However, the ongoing reductions in staffing numbers seen in June provide a stark reminder that underlying conditions across the sector are a long way off returning to those seen before the public health emergency.”

Full release here.