April 2018 UK Markit/CIPS Services PMI 3 May 2018

  • Prior 51.7
  • New orders 52.9 vs 52.4 prior
  • Composite  53.2 vs 53.7 exp. Prior 52.5. Revised to 52.4
  • Markit says data points to a quarterly GDP rate of 0.25%
  • Business activity rises at subdued pace in April
  • Weakest upturn in employment since March 2017
  • Inflationary pressures moderate

Other notes of interest;

The rate of service sector employment growth moderated to its weakest since March 2017. Survey respondents noted that higher payroll costs and tight labour market conditions had weighed on staff recruitment in April.

Higher salary payments continued to push up cost burdens across the service economy in April. Anecdotal evidence linked the latest rise in average input costs to the increased national living wage
and rising pension contributions. However, the overall rate of input price inflation eased since March and remained softer than at any time in 2017. Moreover, the latest rise in average prices
charged by service sector firms was the joint lowest since July 2017

So lower inflationary pressures but higher wage costs and a tightening labour situation, that’s good news for the BOE in terms of the economy overall.

GBPUSD initially fell to 1.3597 but is back up at 1.3611.

Ryan Littlestone

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