Thursday 5th August 2021 - 09:47 (BST)
PMI numbers released by the Chartered Institute of Purchasing & Supply and the Markit Economics during the last few days have shown a slow-down in expansion across the UK’s service, manufacturing and construction sectors.
The IHS Markit/CIPS services Purchasing Managers’ Index (PMI) sank to 59.6 in July, its lowest reading since March, from 62.4 in June. Whilst manufacturing PMI remained flat at 60.4 and today’s construction PMI reading of 58.7 was well below the 64 consensus, all highlighting the difficulties faced within key sectors of the UK economy.
“More businesses are experiencing growth constraints from supply shortages of labour and materials, while on the demand side we’ve already seen the peak phase of pent-up consumer spending,” said IHS Markit’s economics director, Tim Moore.
Higher wages, fuel prices and transport costs have also stemmed recent record growth as the UK economy recovers from its biggest fall in output in more than 300 years during 2020.
GBP remained bullish despite the mixed readings, pushing fresh highs against the euro and key levels of resistance against the US dollar over recent trading sessions.
There will now be greater scrutiny during the Bank of England’s interest rate announcement later today. Analysts expect a hold on all rates and its asset purchase facility heading into September, whilst the bank will also update its inflation forecasts for the rest of 2021.
