UK December flash services PMI 50.0 vs 48.5 expected

• Prior 48.8
• Manufacturing PMI 44.7 vs 46.3 expected
• Prior 46.5
• Composite PMI 49.0 vs 48.0 expected
• Prior 48.2

The services and composite readings came in at a 3-month high but overall, this still points to a contraction in UK economic activity with output declining for a fifth month running. A further deterioration in demand conditions was noted with employment conditions also falling for the first time since early last year. S&P Global notes that:

“The December data add to the likelihood that the UK is in recession, with the PMI indicating a 0.3% GDP contraction in the fourth quarter after the 0.2% decline seen in the three months to September.

“For now, the downturn looks to be relatively mild, and the easing in the rate of decline in December is encouraging news, as is the further marked cooling of inflationary pressures. However, the fact that the downturn has moderated compared to the turmoil created in the immediate aftermath of the botched "mini budget", most notably in financial services, is no real cause for cheer. It is especially worrying to see business confidence and order book indicators remain so low by historical standards, with both of these key gauges signalling heightened degrees of economic stress.

“Hence it’s no surprise to see that businesses are battening down the hatches, most notably by reducing headcounts, in a sign that the downturn not only has further to run but could yet accelerate again, especially given December’s further hike to interest rates.”

/GBP GBP The Great British pound (GBP) or pound sterling is the official currency of the United Kingdom, Jersey, Guernsey, the Isle of Man, Gibraltar, South Georgia, and other pacific territories.The GBP is currently the fourth most-traded currency worldwide in forex markets after the US dollar, euro, and Japanese yen.As the oldest currency in continual use, the GBP holds great weight on the world market and is also the fourth largest reserve currency.The Bank of England (BoE) is the central banking auth The Great British pound (GBP) or pound sterling is the official currency of the United Kingdom, Jersey, Guernsey, the Isle of Man, Gibraltar, South Georgia, and other pacific territories.The GBP is currently the fourth most-traded currency worldwide in forex markets after the US dollar, euro, and Japanese yen.As the oldest currency in continual use, the GBP holds great weight on the world market and is also the fourth largest reserve currency.The Bank of England (BoE) is the central banking auth Read this Term