U.K. Services Weaken to Three-Month Low on Brexit Worries
Friday, 3 August 2018 15:57 WIB |
EUROPE |InggrisU.K.ServicesEkonomi inggris
The U.K. services sector grew at a slower pace than forecast in July as the economy kicked off the third quarter on a 'disappointing' note.
IHS Markit said Friday its services Purchasing Managers Index slid to a three-month low of 53.5, down from 55.1 in June and less than the 54.7 forecast by economists. Companies said Brexit may be holding back projects, while the World Cup and the hot weather reduced consumer footfall.
While Governor Mark Carney said that growth was likely to hold up in the third quarter, Markit's survey suggests expansion may hit a soft patch.
œThe service sector moved back into the slow lane in July, said Tim Moore, Associate Director at IHS Markit. œService providers commented that Brexit uncertainty had held back new project wins, reflecting risk aversion and a wait-and-see approach to investment.
The report also showed that cost pressures in the services sector, which makes up the vast majority of the U.K. economy, had eased. The rate of job creation fell to the weakest since August 2016.
œThe combination of slower output growth and softer price pressures during July will reinforce expectations that any further Bank of England rate rises will be both gradual and limited, Moore said.
A similar gauge for the manufacturing sector, released Wednesday, also fell more than economists forecast last month, although Markit™s construction index unexpectedly jumped.