UK's business activity moderately expands in July

Monday, 05. August 2019 10:32

The United Kingdom's Business Activity Index (PMI) value for July stood at 51.4, marking its fourth consecutive month of growth, according to a release from IHS Markit/CIPS published on Monday. The latest reading was up from 50.2 in June and the highest for nine months and has outpaced market expectations which were closer to the last-month reading.

The service sector in the UK sector was driven by a solid rebound in new work during July, as its growth was strongest since September 2018. A number of survey respondents commented on improved sales to clients in external markets, helped by the weak sterling exchange rate against the euro and US dollar. In the meantime, the backlogs of work dropped for the tenth month running, while the rate of input price inflation was unchanged compared to the previous month. Business optimism towards the year-ahead outlook eased for the second month in a row, with respondents naming domestic political uncertainty and concerns about the global economic outlook as the main reasons for its drop.

"An improved rate of growth in the service sector to the highest since October is welcome news after other PMI surveys showed the sharpest drop in manufacturing output for seven years and a construction sector that is mired in its deepest downturn for a decade. However, the overall picture is one of an economy that is only just managing to skirt recession, with July’s performance among the worst since the height of the global financial crisis in 2009," Chief Business Economist at IHS Markit Chris Williamson said.

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