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MNI: UPDATE UK Data Forecasts - September PMIs

MNI (London)
By Jamie Satchithanantham
     LONDON (MNI) - With no hard data on the agenda for the week commencing
October 2 it will the soft data taking centre stage. The week looks set to be
fairly quiet data-wise, with the three Markit/CIPS purchasing manager indices
the standout releases.
     The PMIs have suggested that growth and underlying business activity in the
UK have held up well since the turn of the year, sometimes at odds with the
official data produced by the Office of National Statistics offering a more
subdued showing.
     Tuesday will see the release of the construction sister survey. In August
the PMI slipped to its weakest showing in a year, falling to 51.1 from 51.9 in
July, with a reported slowdown in new orders to replace existing orders. Of the
eight analysts who cast a forecast, expectations are set as high as 51.5 and as
low as 50.0 - where output neither expands or contracts. Taking the median of
these expectations generates a prediction of an unmoved result, standing still
at 51.5.
     Then, on Wednesday we will get the release of the Services PMI, the most
watched of the three surveys. The PMI fell to 53.2 in August, an 11-month low,
from 53.8 in July with concerns of subdued client demand and heightened
uncertainty about the domestic economic outlook reportedly weighing on business
activity. The September PMI is also seen unchanged at 53.2.
     Official UK service data showed output decline 0.2% m/m in July, after
rising 0.3% m/m in June (revised down from a previous estimate of 0.4% m/m). The
services data for Q3 is seen as one of the more decisive input factors in the
Bank of England's Monetary Policy Committee's dilemma over when to hike the Bank
Rate and tight monetary policy.
     A weaker June result and a weaker-than-expected July will have dampened
sentiment for a hike within the MPC camp and a healthy September PMI showing
will help restore any lost confidence.
                             Sep       Sep
                    Construction  Services
                             PMI       PMI
                           Index     Index
Date Out                  03-Oct    04-Oct
Median                      51.1      53.2
Forecast High               51.5      55.6
Forecast Low                  50        53
Standard Deviation           0.5       0.7
Count                          8        15
Prior                       51.1      53.2
ABN Amro                     N/A      52.8
Capital Economics           50.5      53.4
Credit Suisse                N/A      53.0
Commerzbank                  N/A      53.7
Investec                     N/A      53.7
JP Morgan                    N/A      53.2
Lloyds TSB                  51.5      52.8
Natixis                     51.4      53.7
Nomura                       N/A      54.0
Oxford Economics            51.5      53.0
Pantheon                    51.1      53.2
RBC                         50.3      55.6
Scotia                       N/A      53.5
Societe Generale            50.7      52.7
UniCredit                   51.0      53.0
     On Monday, the Manufacturing PMI showed a slowing in the sector's
expansion, with the headline index falling from 56.7 in August (revised down
from 56.9 previously) to 56.0 in September - virtually in line with the updated
MNI median of 56.0.  
     Despite the mild easing, which was broad based, the survey depicted the
sector firmly in expansion with both New Orders and Production still above their
long-run averages. There were, however, renewed signs of rising inflationary
     Should the picture of solid growth be maintained across the remaining two
surveys it will add to the feeling that the Bank of England remain on track for
a rate hike in November. 
--MNI London Bureau; +44 203-586-2226; email:
MNI London Bureau | +44 203-865-3812 |

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