"The PMI surveys indicate that the pace of UK economic growth slowed to just 0.2% in the second quarter, with a further loss of momentum in June as Brexit anxiety intensified".
-Chris Williamson, Markit
Service-sector activity in the UK surprisingly decelerated in June, a private survey from Markit Economics reported. Markit's services purchasing managers' index released today fell to 52.3 in June from 53.5 in May. The market expectation was for an index reading of 52.7. It remains in a territory above 50 points, which indicates expansion in the industry, while below 50.0 indicates contraction. The closely watched gauge was at its lowest level since April. Growth over the second quarter was the lowest since the first quarter of 2013, averaging 52.7. The index has averaged 55.2 since it was first compiled in July 1996. The outlook for the year was the darkest since December 2012, according to Markit. Companies said uncertainty linked to the EU referendum had weighed on workloads and incoming new business.
Recent data showed, that both manufacturing and services sector activities in the UK have been under pressure as Brexit-related uncertainty darkened the outlook for businesses. Accordingly, the BoE's Monetary Policy Committee is scheduled to meet on Thursday next week on July 14. Some market analysts are predicting a pre-emptive interest rate cut in order for the BoE to curb uncertainty and promote economic activity.
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