May 2018 UK Markit/CIPS services PMI 05 June 2018

  • Prior 52.8
  • Service sector growth continues to recover from March’s recent low
  • New work expands at relatively subdued pace
  • Sharp rise in input costs, driven by higher fuel bills and staff salaries
  • Markit says PMI points to GDP of 0.3%-0.4%

Decent beat and further inflationary pressures.

GBPUSD jumps to 1.3361 from 1.3335 odd. That might give a small boost to August hike hopes for the rabble.

One downside to the data was that margins are being squeezed as firms are finding it hard to pass on increased input costs. That’s not good and it also points to buyers unwilling to pay higher prices.

“A combination of rising salary payments and greater fuel bills resulted in another strong increase in average cost burdens across the service sector. Despite a sharper rise in operating expenses, the latest data pointed to only a modest increase in average prices charged by service providers. Moreover, the rate of charge inflation eased for the second month running to its weakest since June 2017. A number of firms noted that competitive pressures and the need to stimulate demand through promotional discounting had constrained their pricing power”


Ryan Littlestone

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