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United Kingdom PMI June 2024

United Kingdom: Services PMI falls in June amid election uncertainty

The S&P Global UK Services Purchasing Managers’ Index (PMI) fell to 52.1 in June from 52.9 in May, marking a seven-month low. As a result, the index remained above the 50.0 no-change threshold, but signaled a softer improvement in services-sector business activity compared to the previous month.

The slowdown in the UK service sector’s growth in June was primarily due to a cautious approach from clients ahead of the general election, leading to delays in new orders and projects, and slowing job creation. Despite this, there was still a modest increase in new business, particularly from North America and Europe.

Input cost inflation trended lower yet remained elevated. Output price inflation saw a slight acceleration from the previous month’s low, suggesting some companies were able to raise their fees due to strong pricing power. Finally, business sentiment dipped slightly due to the uncertainty surrounding the general election.

Joe Hayes, principal economist at S&P Global Market Intelligence, said:

“We are seeing some evidence of a pre-general election seize up across the UK services economy […] Nevertheless, we’re on track for another quarter of GDP growth, according to Composite PMI data for the three months to June, albeit one that will be less punchy than the first quarter’s 0.7%.”

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