UK DATA
- The UK services PMI was revised three tenths lower to 51.1 in the final December release (51.4 prelim), leaving a very mild bounce from the 50.8 in Nov.
- The tepid recovery is in contrast to the stronger relative rebound in the Eurozone PMIs this morning.
- The flash release had indicated as such but this final release notes three consecutive monthly declines in staffing numbers for service providers, with December seeing its sharpest drop since Jan 2021. 23% of respondents reported a decline vs 12% signalling a rise. “Service providers widely commented on hiring freezes and the non-replacement of leavers due to rising payroll costs.”
- “Constrained recruitment plans, tight budget setting among clients, and worries about the broader UK economic outlook all contributed to subdued business optimism in December. The degree of positive sentiment was the joint-lowest for two years (equalling that seen in November).”
- The composite PMI meanwhile was revised a tenth lower to 50.4 in the final December release, also pushing it a tenth below the 50.5 in Nov for its lowest since Oct 2023. It implies close to zero real GDP growth.
- However, overall cost inflation increased by its most since April which led to a robust and accelerated rise in prices charged, with the latter led by services inflation hitting a six-month high to remain “well above the pre-pandemic average”.
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