UK: Disappointing services PMI confirms weakness - BBH

The slightly disappointing UK service PMI rounds out the three PMI reports and each was reported below expectations, according to the research team at BBH.  

Key Quotes

“The miss was not large but the direction is notable.  The services PMI eased to 53.4 from 53.8 and the composite reading eased to 53.8 from 54.3.  In fairness, the Q2 composite average of 54.8 is above the 54.6 average of Q1 and last year's average of 53.5.”  

“This suggest that growth may not have deteriorated from the 0.2% quarter-over-quarter pace recorded in Q1.  However, the quarter appears to have ended on a weak note.  In June, the employment sub-index was the strongest in a little more than a year.  Price data was mixed, with input prices rising and prices charged easing, warning of the risk of a profit squeeze.”

“Sterling has snapped an eight-day advance with a three-day fall this week.  Today's losses were marginal and may have exhausted themselves in the European morning a little below $1.29.  Initial resistance is seen in the $1.2940 area.”