UK April flash services PMI 58.3 vs 60.0 expected

Prior 62.6Manufacturing PMI 55.3 vs 54.0 expectedPrior 55.2Composite PMI 57.6 vs 59.0 expectedPrior 60.9Both the services and composite readings are the softest in three months as surging inflation pressures and geopolitical tensions amid the Russia-Ukraine conflict weigh on demand conditions. The steep drop in services growth momentum was the largest since the omicron hit at the end of last year. But at least manufacturing activity held up although supply bottlenecks continue to build amid the conflict in Ukraine and lockdowns in China.Meanwhile, input cost inflation jumped for a fourth straight month to the second quickest pace on record while input price inflation in the manufacturing sector was the strongest on survey record. The rate of cost inflation in the services sector was the second-fastest on record as well. S&P Global notes that:“The survey data signal a marked cooling in the pace of UK economic growth during April, caused by an abrupt slowing in demand. Orders received by manufacturers have almost stalled, driven by an increasing loss of exports, and growth of demand for services has slumped to among the weakest since the lockdowns of early 2021.“High prices and the associated rising cost of living were often cited as a principal cause of lower demand, with covid also continuing to affect many businesses. Brexit and transport delays were seen as having further impeded export sales, while the Ukraine war and Russian sanctions also led to lost overseas trade.“Concerns over the worsening inflation picture are meanwhile flamed by another near-record leap in firms' costs.“Although the current pace of growth remains relatively robust, firms are taking a more cautious approach to hiring and spending as demands cools and the outlook becomes gloomier, to suggest that the slowdown in the economy has further to run. While the start of the year saw businesses in high spirits amid the reopening of the economy, this ebullient mood is being eroded by concerns about the rising cost of living, the Russia-Ukraine war, lingering pandemic disruptions and rising interest rates.”