-Chris Williamson, chief economist at Markit
Activity in the UK services sector rose more than expected last month, suggesting the UK economy picked up momentum going into the second half of the year. The Markit/CIPS services PMI climbed by 2 points in June to 58.5, overshooting economists' forecast and staying firmly above the 50-mark threshold that separates growth from contraction. The breakdown of the upbeat PMI data sent some mixed signals. British services companies took on staff at the slowest pace this year, while new orders also increased at the weakest pace so far in 2015. However, businesses' optimism about the coming year held virtually unchanged at a high level.
Combined with manufacturing and construction data earlier this week, Markit said Britain's economy was likely to expand around 0.5% from April through June, compared with 0.4% in the first quarter. However, the recovery looks increasingly imbalanced, as growth in the country's manufacturing sector declined to the lowest level in more than two years in June. The UK manufacturing PMI for June dipped to 51.4, from 51.9, while economists had been expecting a further advance to 52.5. The strong Pound, sluggish demand from the Euro zone, where the Greek debt crisis is sapping demand is hampering the British economy.
© Dukascopy Bank SA