News Story

UK Services PMI Falls to a 3-month Low in July

- Activity in the UK service sector slowed in July, according to a closely watched business survey released on Friday.

Research firm IHS Markit said its services purchasing managers’ index fell rose to 53.5 last month from 55.1 in June. That compared to forecasts for a reading of 54.7.

On the index, a reading above 50.0 indicates expansion, below indicates contraction.

IHS Markit highlighted that business activity rose at the slowest pace since April, while job creation was the weakest since August 2016.

The research group also noted that inflationary pressures moderated in July.

A similar survey of the manufacturing sector on Wednesday showed that activity grew at the slowest pace in three months in July, while positive sentiment dipped to a 21-month low.

Another report on Thursday showed that construction sector activity accelerated at its fastest pace in more than a year last month.

The Bank of England raised interest rates Thursday despite deepening worries over Brexit, but indicated that any more hikes will be at a “gradual” pace.

The bank said it raised interest rates because the economy has recovered from its slowdown at the start of the year, but warned that Brexit could damage the recovery.

It was only the second rate hike in a decade after the BoE last raised interest rates in November, reversing a rate cut imposed after the Brexit vote in 2016.

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