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The UK’s service sector saw slower growth in July, S&P Global data showed Thursday.
The headline seasonally adjusted S&P Global/CIPS UK services PMI business activity index was down to 51.5 points in July from 53.7 in June.
This marks the lowest performance in the current phase of expansion that began in February, but is in line with a flash estimate of 51.5.
‘Companies reporting a rise in output typically linked this to resilient household spending on travel and leisure services. However, many survey respondents also commented on headwinds from subdued business and consumer confidence, which resulted in slower progress with converting sales opportunities,’ S&P explained.
The composite PMI fell to 50.8 in July, down from 52.8 in June. This marks the sixth consecutive month that it has registered above the 50-point threshold and is slightly better than a flash estimate of 50.7.
However, falling closer towards the 50-point no-change mark, it shows private sector growth slowed in Britain over the month.
S&P economics director Tim Moore said: ‘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.’
On Tuesday, new data showed that the manufacturing PMI worsened to 45.3 in July, from 46.5 in June. This was slightly below a previous flash estimate of 46.5 and marked the lowest reading in the year so far and the joint-weakest since May 2020.
The composite PMI is a weighted average of the UK’s manufacturing and services PMIs, compiled by S&P Global from responses to surveys sent to 650 services companies and 650 manufacturers, with data collected between July 12 and 27.
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