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Growth in the UK’s services sector slowed in June, survey data on Wednesday showed, but the private sector as a whole continued to expand.
The S&P Global/CIPS services purchasing managers’ index fell to 53.7 points in June, from 55.2 in May. June’s reading came in line with the previous flash estimate.
‘June data indicated a sustained upturn in UK service sector output, but the rate of expansion eased to its weakest for three months amid a much softer rise in new orders,’ the survey read.
‘In contrast, staffing levels expanded at the fastest pace since last September as improving candidate availability helped to boost recruitment.’
Respondents cited resilient business and consumer spending, but noted continued inflationary pressure on their budgets.
There were a ‘number of reports’ which reported weak client demand in the real estate and construction sectors, which was blamed on high interest rates.
Exports saw an expansion, with service providers citing growth in demand from the US and Europe. Inflation in prices charged by services firms also cooled from the previous month, as cost pressures weakened somewhat.
‘Where output charges were increased, this was often attributed to additional labour costs and higher-than-expected inflation across the wider UK economy,’ S&P Global noted.
The composite PMI, which measures services and manufacturing, fell to 52.8 from 54.0. It was also in line with the flash estimate.
On Monday, the manufacturing PMI had fallen to a six-month low of 46.5 from 47.1 - indicating a slightly worse contraction in the sector.
The UK services PMI is compiled by S&P Global from responses to surveys sent to purchasing managers’ at around 650 services firms, with data collected between June 12 and 28.
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