UK May services PMI slumps, signals slowest expansion since February

The services sector activity in the UK economy reversed course and posted a bigger-than expected drop in the month of May, a fresh report from Markit Economics showed on Monday.

The services PMI slumped to 53.8 in May versus a 55.8 reading booked in April. Markets predicted a drop to 55.0 last month.

Key Points:

Business activity rises at weakest pace since February  

Slight loss of momentum for new business growth

Input cost inflation eases to eight-month low

Chris Williamson, Chief Economist at Markit, noted: “Despite slower growth in May, the surveys indicate that the economy has regained some momentum in the second quarter. The three PMI surveys are running at levels that are historically consistent with GDP growing at a robust 0.5% rate, albeit with the slowing in May posing some downside risks to the near-term outlook.”