LONDON (Reuters) – Britain’s private sector activity slowed sharply in June despite falling inflation as higher Bank of England interest rates weighed on demand, according to a published S&P Global survey. Wednesday.
The S&P Global/CIPS Services Purchasing Managers’ Index (PMI) for Britain fell to 53.7 in June from 55.2 in May, in line with preliminary estimates.
The figure remains well above the 50 mark, which separates growth from contraction, but it is still the lowest figure since March, while the one-month decline is the steepest since August 2022.
The composite PMI, which includes the manufacturing sector, also fell to its lowest level in three months, identical to its “flash” estimate of 52.8.
“The services sector showed further signs of weakness in June as rising interest rates and concerns about the UK economic outlook weighed on demand,” said Tim Moore, chief economics officer at S&P Global Market Intelligence. .
Services related to construction and real estate have been particularly affected by the rise in rates, according to S&P.
Rising input prices hit their lowest level since May 2021, but remain above pre-pandemic levels, S&P Global said.
“Broad-based wage increases have offset lower energy and fuel prices,” Moore said.
Companies have increased their workforce in the largest proportions since September 2022 in order to make up for the backlog accumulated over the previous months.
(Report David Milliken, Corentin Chapron, edited by Kate Entringer)
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