UK PMI services missed market expectations, but GBP is steadily in range against USD, EUR and JPY so far.
PMI services rose to 52.8 in April, up from 51.7 but missed consensus of 53.5. Markit’s key findings are not too encouraging for the UK. It noted that business activity rises at subdued pace in April. There is the weakest upturn in employment since March 2017 and inflationary pressures are moderate.
Comments from Chris Williamson, Chief Business Economist at IHS Markit:
“The services survey adds to signs that the rate of economic growth remained disappointingly subdued at the start of the second quarter. The three PMI surveys collectively showed only a muted rebound in business activity after being disrupted by heavy snowfall in March, failing to regain February’s pace of growth to suggest that the underlying performance of the economy has continued to deteriorate.
“The overall expansion signalled by the three surveys in April was the second-weakest since the Brexit vote, pointing to a quarterly rate of GDP growth of around 0.2% at the start of the second quarter.
“Jobs growth across services, manufacturing and construction has also slowed to its weakest since the referendum and inflationary pressures have eased.
“The surveys have indicated that sales, investment and hiring are being hit by uncertainty about the economic outlook as well as sluggish domestic demand, notably among consumers.
“The disappointing services data will add to expectations that the MPC will take its finger firmly off the rate hike trigger. Any further slowing will also raise questions as to whether the November rate hike may have been ill-timed.”
