UK January flash services PMI 48.0 vs 49.7 expected

• Prior 49.9
• Manufacturing PMI 46.7 vs 45.5 expected
• Prior 45.3
• Composite PMI 47.8 vs 49.1 expected
• Prior 49.0

That's a steep drop in UK services activity, with the headline reading slumping to a two-year low. There is a bit of reprieve in that manufacturing activity nudged higher but overall, the data highlights a further sustained downturn in the UK economy to start the new year. S&P Global notes that:

“Weaker than expected PMI numbers in January underscore the risk of the UK slipping into recession. Industrial disputes, staff shortages, export losses, the rising cost of living and higher interest rates all meant the rate of economic decline gathered pace again at the start of the year. Jobs also continued to be lost as firms tightened their belts in the face of these headwinds, though many other firms reported being constrained by an ongoing lack of available labour.

“There were some bright spots in the survey, including improved business expectations for the year ahead and a further cooling of inflationary pressures. The overall rate of decline indicated also remains only modest. But this is undeniably a disappointing start to the year for the UK, reflecting not just short-term hits to growth such as strike action and the rise in energy costs due to the Ukraine war, but also highlighting the ongoing damage to the economy from longer term structural issues such as labour shortages and trade woes linked to Brexit Brexit Brexit or British Exit describes the United Kingdom’s decision to formally leave the European Union (EU) as originally determined via a June 23, 2016 referendum. Since then, the ongoing debate over Brexit has had a strong influence on the country’s politics and currency, the British pound (GBP).The immediate aftermath of the referendum saw an extraordinarily tight vote and unexpected result, which collectively drove the GBP to lows not seen in decades.Originally following the referendum, former Brexit or British Exit describes the United Kingdom’s decision to formally leave the European Union (EU) as originally determined via a June 23, 2016 referendum. Since then, the ongoing debate over Brexit has had a strong influence on the country’s politics and currency, the British pound (GBP).The immediate aftermath of the referendum saw an extraordinarily tight vote and unexpected result, which collectively drove the GBP to lows not seen in decades.Originally following the referendum, former Read this Term.”