UK July final services PMI 51.5 vs 51.5 prelim

<ul><li>Prior 53.7</li><li>Composite PMI 50.8 vs 50.7 prelim</li><li>Prior 52.8</li></ul><p>The headline reading is the weakest since February and signifies an extended downturn in the past few months, as growth conditions ease further in the UK. Overall business activity is near stagnation now and that will keep pressure on the BOE as they seek to tighten policy further. S&amp;P Global notes that:</p><p>"The loss of momentum signalled by service providers in July
suggests that the UK economy is set to flatline at best in the
coming months as higher borrowing costs take a bigger toll
on consumer spending and business confidence. Service
sector companies saw the weakest rise in new work for six
months, while job creation slipped as some firms responded
to softer market conditions by putting the brakes on hiring.
</p><p>"There were sporadic reports that subdued demand had
led to more competitive pricing and the pass through
of lower fuel costs, which contributed to a slowdown in
output charge inflation to its second-lowest since August
2021. However, there was no let-up in pressure on business
expenses as the rate of input cost inflation was virtually
unchanged from that seen on average in the second quarter
of 2023.
</p><p>"Survey respondents widely commented on strong cost
pressures due to higher salary payments in July, which will
add to concerns among policymakers that sticky inflation
and stagnant growth will prove a persistent challenge for
the UK economy during the second half of the year."</p>

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