UK August final services PMI 49.5 vs 48.7 prelim

<ul><li>Prior 51.5</li><li>Composite PMI 48.6 vs 47.9 prelim</li><li>Prior 50.8</li></ul><p>This marks the first fall in UK business activity since January, with the slightly better revisions helping to not paint a worse picture of the UK economic backdrop – for now at least. S&amp;P Global notes that:</p><p>"Service providers saw customer spending reverse course
during August as higher borrowing costs, subdued business
confidence, and stretched household finances all acted to
curtail sales opportunities.
</p><p>"After a modest recovery over the past six months, service
sector businesses are now clearly feeling the impact of
rising interest rates on client demand. Worries about the
broader business climate also dampened spending in
August, with firms suggesting that faltering UK economic
growth and sticky inflation were weighing on the outlook.
</p><p>"Adding to signs of reduced pressure on business capacity,
the latest survey indicated that backlogs of work decreased
at the fastest pace for over three years. Service providers
appear to have gently put the brake on staff hiring, with job
creation easing to its lowest since March.
</p><p>"Key data to watch in the coming months will be the
extent to which weaker employment trends and softer
demand translate into falling domestic inflation. August's
survey data provided a signal that heightened competitive
pressures have helped to push down output charge inflation
across the service economy, as the latest round of price
hikes was the slowest seen for two years."</p>

This article was written by Justin Low at www.forexlive.com.