"Alongside an ongoing surge in construction and the largest quarterly rise in manufacturing output for 20 years, the services PMI confirms that the economy is firing on all cylinders."
- Chris Williamson, Chief Economist at Markit
The pace of growth in the U.K. services sector slowed in June, clouding the country's economic outlook. In its report Markit said the seasonally adjusted Markit/CIPS Services Purchasing Managers' Index dropped to 57.7 in June from the May's reading of 58.6. The figure was shy of analysts' expectations for a decline to 58.3. Despite the disappointing headline figure, June's data indicated the sharpest rise in new business volumes for six months, while all-sector index points at GDP quarterly growth of 0.8% in the three month to June. Recent sustained strong economic activity and elevated confidence in the outlook spur demand across a wide range of business services, including marketing and advertising, public relations, corporate finance transactions, etc. In the meantime, the overall substantial increase in the housing market activity helps estate agents and a number of other property-related services. Also, individual details of the survey remained strong and continue to indicate further economic strength going forward, supporting expectations economic growth will reach 3% this year and the Bank of England could start raising rates before the end of 2014.
The Pound weakened versus the U.S. Dollar following the release of the data, with GBP/USD losing 0.15% to trade at 1.7138, down from 1.7156 ahead of the data.
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