Thursday, May 5, 2016

Forex - UK: Apr Services PMI falls to 52.3, points to 0.1% GDP growth in Q1

The UK services PMI has fallen to 52.3 in April from 53.7 in February, weaker than the consensus of 53.5 (4cast: 52.8).

Combined with the manufacturing and construction surveys at 49.2 and 52.0 respectively (prev: 51.0, 54.2), this pushed the composite index lower to 51.9 (prev: 53.6).

Markit commented "The slowdown in the service sector follows similar weakness in manufacturing and construction to make a triple-whammy of disappointing news on the health of the economy at the start of the second quarter.

"The PMI surveys are collectively indicating a nearstalling of economic growth, down from 0.4% in the first quarter to just 0.1% in April.

"Some of the slowdown may be attributable to the early timing of Easter, though April also saw an increase in the number of companies reporting that uncertainty about the EU referendum caused customers to hold back on purchases, exacerbating already-weak demand linked to global growth jitters and ongoing government spending cuts.

"The rate of job creation across the three sectors has meanwhile slowed to the weakest for two-anda-half years, attributed to the combination of weakened demand, the uncertain outlook and the rise in costs associated with the introduction of the living wage.

"The deterioration in April pushes the surveys into territory which has in the past seen the Bank of England start to worry about the need to revive growth, either by cutting interest rates or through non-standard measures such as QE."

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Forex - UK: Apr Services PMI falls to 52.3, points to 0.1% GDP growth in Q1 Rating: 4.5 Posted by: Unknown


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