Services PMI 47.9 vs 51.7 expectedPrior 52.7Manufacturing PMI 53.7 vs 53.0 expectedPrior 53.7Composite PMI 48.5 vs 51.6 expectedPrior 52.6<\/p>\n
Ouch. That’s a big miss on the services print as business activity there falls to the lowest in 64 months. That’s leading UK economic activity to contract in May, with the composite print being the weakest in 13 months.<\/p>\n
Service firms signaled the sharpest decline in business
\nactivity since January 2021 citing greater economic hesitancy and
\nweaker investment sentiment among clients, alongside
\ndelayed consumer spending decisions in response to the
\nMiddle East conflict. Aside from the Covid pandemic, the
\nlatest reading was the lowest for nearly a decade (July 2016).<\/p>\n
As for the stronger manufacturing print, it’s mostly due to frontloading as a temporary demand pick up was noted to beat price hikes and
\npotential supply disruptions. So, the underlying negative impact from the Middle East conflict runs much deeper.<\/p>\n
On the prices front, input price inflation did ease slightly since April but
\nremained well above its long-run average. Meanwhile, prices charged by UK private sector firms continued to rise
\nsharply although at a slightly slower pace than the 39-month
\nhigh seen in April.<\/p>\n
Trouble, trouble. S&P Global notes that:<\/p>\n
\u201cThe UK economy is facing a perfect storm, as rising political
\nuncertainty adds to the growing impact from the war in the
\nMiddle East. Businesses are reporting falling output, surging
\ninflation, supply shortages and job cuts in May.\n<\/p>\n
“The May PMI data indicate that the economy contracted at
\na 0.2% quarterly rate, representing a marked contrast to the
\nrobust growth seen earlier in the year. The blame lies first and
\nforemost with the war in the Middle East, though companies
\nare also noting that domestic politics are taking an increasing
\ntoll, driving uncertainty higher, in turn deterring spending,
\nhiring and investment.\n<\/p>\n
“Things could well get worse in the coming months, as we
\nhave been seeing some support to manufacturing from
\nprecautionary stock building which will inevitably fade once
\nwarehouses are full.\n<\/p>\n
“Just as the economy shows signs of sinking into decline,
\nprices are surging higher to herald a marked upturn in
\ninflation in the months ahead as these costs pass through to
\nconsumers.\n<\/p>\n
“This combination of a faltering economy and spiking price
\npressures leaves the Bank of England in a major quandary,
\nfacing the growing need to hike rates to help contain inflation
\nbut thereby adding to recession risks.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Services PMI 47.9 vs 51.7 expectedPrior 52.7Manufacturing PMI 53.7 vs 53.0 expectedPrior 53.7Composite PMI 48.5 vs 51.6 expectedPrior…\n","protected":false},"author":2,"featured_media":132404,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[84,1294,56,54,55],"class_list":["post-596095","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-uk","tag-united-kingdom","tag-unitedkingdom"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/596095","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=596095"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/596095\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/132404"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=596095"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=596095"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=596095"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}