UK services PMI drops to 50.2 in June vs. 51.0 expected (GBP keeps losses)

The UK services sector activity slowed down its pace of expansion in the month of June, the latest survey report from Markit Economics showed this Wednesday.

The headline seasonally adjusted IHS Markit/CIPS UK Services PMI Index fell to 50.2 in June vs. 51.0 booked in the previous month while missing expectations (51.0 expected).

Key Points:

Business activity rises only fractionally in June.

Jobs growth picks up, despite weak demand.

Strong increase in input costs.

Chris Williamson, Chief Business Economist at IHS Markit, which compiles the survey, noted:

"The near-stagnation of the services sector in June is one of the worst performances seen over the past decade and comes on the heels of steep declines in both manufacturing and construction. Collectively, the PMI surveys indicate that the economy has slipped into contraction for the first time since July 2016, suffering the second-steepest fall in output since the global financial crisis in April 2009. “

"The June reading rounds off a second quarter for which the surveys point to a 0.1% contraction of GDP.”