Is the risk of a UK recession increasing? New data from IHS Markit suggests the UK service sector has just seen its weakest growth for the best part of a year. The service sector Purchasing Managers’ Index fell back from 53.8 in July to 53.2 in August.
While any reading over 50 indicates growth there are worries about rising UK costs due to the muscular euro and increased uncertainty over spending decisions, many clearly being delayed from the UK end.
“In services,” said Chris Williamson, chief economist at IHS Markit, “the weaker growth trend was most evident in consumer–facing sectors such as hotels & restaurants and other personal services, which includes businesses such as cinemas, gyms and hairdressers. The overall level of optimism also remained subdued,” he added.
Despite the pale UK economic pallor sterling edged up robustly against both the dollar and the euro helped by appalling factory numbers from the US – +3.3% in June vs -3.2% in July – and frayed nerves around Kim Jong-un’s apparent ‘begging for war’.
The uncertainty of the European Central Bank’s Thursday meeting adds to the currency jitters. At close to 4pm the pound had re-crossed the $1.30 threshold at $1.3023, up +0.71%, while the euro was down -0.39% against the pound at 0.9163.
- UK FTSE 100 7,372.92 -0.52%
- Dow 21,871.33 -0.52%
- S&P 500 2,469.86 -0.27%
- Nasdaq 6,421.09 -0.23%
- Nikkei 225 19,385.81 -0.63%
- DAX 12,175.44 +0.60%
- CAC 40 5,104.69 +0.01%
- Gold 1,340.50 +0.78%
- Oil WTI 48.70 +2.98%
Bank of England settles with Unite
Earlier today the Bank of England settled its long-running pay dispute with Unite workers, which lead to Threadneedle Street's first ever strike last month on a 1% pay offer. "As part of the deal Unite has,” the union said earlier, “also secured extra annual leave for bank staff, as well as a payment for lower paid staff in the 2017/18 pay review."