July Flash PMI: "Shortages Of Staff And Materials Hinder Recovery"

UK July flash PMI data came in much weaker than expected: Services 57.8 (62.0 expected, 62.4 prior), Manufacturing 60.4 (62.4 exp., 63.9 prior), and Composite 57.7 (61.5 exp., 62.2 prior).

• From the IHS Markit report: "The speed of recovery was the weakest since March, with survey respondents widely reporting staff and raw material shortages due to the pandemic. Concerns about the loss of momentum contributed to the lowest degree of optimism towards the business outlook for nine months."
• On employment: "difficulties recruiting staff remained a key factor holding back efforts to boost business capacity. Employment growth eased to its slowest since March, with survey respondents often citing a lack of candidates to fill vacancies and an unusually large number of staff departures."
• On prices: "Average cost burdens increased at the fastest pace since the survey began in January 1998, fuelled by a steeper rise in the service sector. This was linked to wage inflation, higher transport bills and price hikes by suppliers. Manufacturers also recorded another rapid upturn in purchasing prices, but the rate of inflation eased from June's all-time high."