UK DATA: Flash PMIs: Progress on services prices but core goods price pressures
A little higher-than-expected across manufacturing, services and composite measures; there's something for everyone in the details. On the growth side the UK appears to be continuing its relatively strong performance seen in H1 (a number of analysts look for a slowdown in H2). On the costs side things are more mixed but still moving in the right direction for services: input prices slowed overall to the slowest pace since Jan 2021 - largely due to services. Private sector prices saw the slowest rise since early 2021 but there were some efforts to pass on costs from manufacturers. The services price progress is welcome for all MPC members - but some will be concerned that core goods prices look to be picking up earlier than previously expected (which has already been seen to some extent in the July CPI data already) - this will be a bit of a concern for headline CPI going forward, particularly for some of the more hakwish members.
From press release:
- "Rising business activity and resilient demand conditions contributed to a greater uplift in staff hiring, with the rate of employment growth the fastest since June 2023."
- "Input costs rising at the slowest pace since January 2021. This largely reflected a considerable easing in cost pressures within the service economy. In contrast, higher freight and raw material costs meant that input price inflation across the manufacturing sector remained stronger than seen in the first half of 2024."
- "Efforts to pass on rising input costs led to another robust increase in average prices charged by private sector firms in August. However, the latest rise was among the slowest seen since the start of 2021."
- "Composite Output Index was the highest since April and signalled a solid increase in private sector business activity."