020 7898 0500The UK service Purchasing Managers Index (PMI) fell to an 11-month low in the month of August, which came below expectations. From a reading of 53.8 in July, this slid to 53.2 last month and, while any figure above 50 represents expansion, it is the slowdown in the rate of growth that is the main cause for concern.
When the dominant services data is combined with the recently released strong manufacturing and weak construction PMIs, UK GDP is shown to have grown by just 0.3% in the last quarter and appears to be stalling all the time. British service sector companies did, however, take on more staff last month, though this in itself is a potential cause for concern; if the additional staff don’t generate extra growth the UK economy will be even less productive.
In addition, Reuters reported that UK car sales fell by just under 7% year-on-year in August. The car industry has now slipped in sales for five months running, thereby fueling further concerns regarding the UK economy. It is extremely quiet for UK economic data today and so any sterling movements are likely to be a result of events elsewhere.
