-
Policy
Policy
Exclusive interviews with leading policymakers that convey the true policy message that impacts markets.
LATEST FROM POLICY: -
EM Policy
EM Policy
Exclusive interviews with leading policymakers that convey the true policy message that impacts markets.
LATEST FROM EM POLICY: -
G10 Markets
G10 Markets
Real-time insight on key fixed income and fx markets.
Launch MNI PodcastsFixed IncomeFI Markets AnalysisCentral Bank PreviewsFI PiFixed Income Technical AnalysisUS$ Credit Supply PipelineGilt Week AheadGlobal IssuanceEurozoneUKUSDeep DiveGlobal Issuance CalendarsEZ/UK Bond Auction CalendarEZ/UK T-bill Auction CalendarUS Treasury Auction CalendarPolitical RiskMNI Political Risk AnalysisMNI Political Risk - US Daily BriefMNI Political Risk - The week AheadElection Previews -
Emerging Markets
Emerging Markets
Real-time insight of emerging markets in CEMEA, Asia and LatAm region
-
Commodities
Commodities
Real-time insight of oil & gas markets
-
Credit
Credit
Real time insight of credit markets
-
Data
-
Global Macro
Global Macro
Actionable insight on monetary policy, balance sheet and inflation with focus on global issuance. Analysis on key political risk impacting the global markets.
Global MacroDM Central Bank PreviewsDM Central Bank ReviewsEM Central Bank PreviewsEM Central Bank ReviewsBalance Sheet AnalysisData AnalysisEurozone DataUK DataUS DataAPAC DataInflation InsightEmployment InsightGlobal IssuanceEurozoneUKUSDeep DiveGlobal Issuance Calendars EZ/UK Bond Auction Calendar EZ/UK T-bill Auction Calendar US Treasury Auction Calendar Chart Packs -
About Us
To read the full story
Sign up now for free trial access to this content.
Please enter your details below.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
Real-time Actionable Insight
Get the latest on Central Bank Policy and FX & FI Markets to help inform both your strategic and tactical decision-making.
Free AccessMNI: UK Services Sector Activity Hits Eight Month High in June
-- IHS Markit/CIPS UK Services PMI 55.1 in June vs 54.0 in May
By Jamie Satchi
LONDON (MNI) - The UK services sector recorded a robust and accelerated
upturn in business activity in June, boosted by a surge in new work and
extending the recovery in growth seen since March's snow-related disruption,
data from IHS Markit/CIPS showed on Wednesday.
The UK Services Purchasing Managers' Index (PMI) rose to 55.1 in June from
54.0 in May, above the MNI median estimate of 53.9 and the highest reading since
last October. June marks the 23rd successive month that the headline index has
sat above the neutral 50 threshold.
Survey respondents -- particularly those working in business and financial
services -- reported a general upturn in client demand, while there were also
reports that sunnier weather conditions had boosted consumer spending.
--NEW WORK SURGES
Mirroring the trend seen in overall business activity, the data revealed a
robust and accelerated rise in new work, with the rate of new business growth
rising to a level last seen over a year ago.
Survey respondents attributed the improvement to "successful product
launches, new marketing initiatives and improving economic conditions".
Firms, however, continued to lament Brexit-related uncertainty. There were
reports that business investment had been held back, particularly in relation to
spending by large corporate clients.
--BACKLOGS UP
Stronger demand placed increased pressure on operating capacity, with the
latest data pointing to the biggest rise in order backlogs since July 2015.
Along with higher-than-expected demand, recruitment difficulties also
contributed to the higher volumes of unfinished work.
--RECRUITMENT DIFFICULTIES
Employment numbers increased only slightly in June, with the rate of job
creation broadly level with the 13-month low seen in April.
Some business respondents reported that tight labour market conditions and
squeezed margins had led to the non-replacement of voluntary leavers.
--DOOR OPEN FOR AUG HIKE
"Stronger growth of service sector activity adds to signs that the economy
rebounded in the second quarter and opens the door for an August rate hike,
especially when viewed alongside the news that inflationary pressures spiked
higher," said Chris Williamson, Chief Business Economist at IHS Markit.
According to Williamson, Q2's set of activity surveys point to an increase
in GDP growth to 0.4%, up from the 0.2% recorded in Q1 (recently revised up by
0.1pp on better construction data).
--COSTS RISE FURTHER
Business costs rose further in June, driven by higher fuel bills and staff
salaries, according to the report.
Higher operating expenses resulted in the fastest rate of prices charged
inflation since March. In some cases, service sector firms noted that high
levels of capacity utilisation justified passing on greater costs to new
customers.
"The sharp rise in business costs, linked to surging oil prices and the
need to offer higher wages, suggests inflation will also pick up again from its
current rate of 2.4%," said Williamson.
--QUALITY OF GROWTH QUESTIONED
Despite the improvement in the UK Services PMI notched in June, Williamson
cautioned that Brexit-related concerns are holding back business investment.
"The survey once again highlights how the business outlook remains clouded
by widespread concerns about the impact of Brexit uncertainty in particular,"
said Williamson.
"Such a divergence between current and expected future activity stokes
worries that the upturn is being fuelled by short-term spending, based on hopes
that uncertainty will lift, and likely masks a lack of longer-term business
investment," he added.
--MNI London Bureau; +44 203-586-2226; email: jamie.satchithanantham@marketnews.com
--MNI London Bureau; +44 207-862-7489; email: ukeditorial@marketnews.com
[TOPICS: MABDS$,M$B$$$,M$E$$$,MT$$$$]
To read the full story
Sign up now for free trial access to this content.
Please enter your details below.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.