- Prior 52.9
- Manufacturing PMI 51.4 vs 51.3 expected
- Prior 51.2
- Composite PMI 51.7 vs 53.1 expected
- Prior 53.0
Election jitters starting to creep in? The headline reading is a 7-month low and that is weighing on the overall UK business activity for June. The only bright side is that manufacturing conditions are seen improving further, with the reading there being a 23-month high. Going back to services activity, S&P Global notes that there is some evidence that the slowdown was partly driven by a pause in client spending decisions ahead of the election period.
“Flash PMI survey data for June signal a slowing in the pace of economic growth, indicating that GDP is now growing at a sluggish quarterly rate of just over 0.1%.
“The slowdown in part reflects uncertainty around the business environment in the lead up to the general election, with many firms seeing a hiatus in decision making pending clarity on various policies.
“Meanwhile, from an inflation perspective, stubbornly persistent service sector inflation – a major barrier to lower interest rates – remains evident in the survey, but should at least cool further from the current 5.7% pace in coming months. However, companies' costs are rising, most notably in manufacturing, where shipping costs in particular are spiking again and adding to a renewed rise in inflationary pressures from goods.
“In short, while a slowdown in economic growth may prove temporary, should businesses react positively to the policies announced by any new government, the stubbornness of underlying inflationary pressures above the Bank of England’s target still looks somewhat engrained.”
