UK services PMI eases in Nov, a big miss on expectations

The services sector activity in the UK economy stalled its ongoing recovery mode and fell more-than-expected in November, a fresh report from Markit Economics showed on Tuesday.

The services PMI eased to 53.8 in November versus a 55.6 reading booked in October. Markets predicted an expansion to 55.0 last month.

Key Points:

Business activity growth slows from October’s six-month high

Sharp and accelerated rise in prices charged by service providers

Job creation remains subdued in November

Chris Williamson, Chief Economist at Markit, noted: “Slower service sector growth comes as a disappointment after the improved performances of both manufacturing and construction in November. However, despite the weaker service sector expansion, the latest survey data indicate that the economy is on course to enjoy robust growth in the fourth quarter. The survey data are so far consistent with the economy growing at a quarterly rate of 0.45% in the closing months of 2017. “Future expectations ticked higher but nevertheless remain very low by historical standards, underscoring the potential for risk aversion to intensify and subdue growth if the news flow relating to Brexit deteriorates.”