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U.K. services PMI falls to 5-month low of 56.5 in May

Published 03/06/2015, 09:33
Updated 03/06/2015, 09:35
© Reuters. U.K. services PMI falls to 5-month low of 56.5 in May
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Investing.com - U.K. service sector activity expanded at the slowest rate in five months in May, dampening optimism over the health of the economy, industry data showed on Wednesday.

In a report, market research group Markit said the seasonally adjusted Markit/CIPS Services Purchasing Managers Index declined to 56.5 last month from a reading of 59.5 in April. Analysts had expected the index to fall to 59.2 in May.

On the index, a level above 50.0 indicates expansion in the industry, below 50.0 indicates contraction.

The rates of growth in both total business activity and new work slowed to the weakest in 2015 so far, but nevertheless remained sharp overall and stronger than the long-run survey averages.

Outstanding work continued to rise, despite further strong workforce growth, while firms reported lower business uncertainty following the result of the general election.

Commenting on the report, Chris Williamson, Chief Economist at survey compilers Markit said, “The surveys point to GDP growing at a quarterly rate of just 0.4% in May, raising doubts about the ability of the economy to rebound convincingly from the weakness seen at the start of the year."

GBP/USD was trading at 1.5288 from around 1.5354 ahead of the release of the data, while EUR/GBP was at 0.7290 from 0.7258 earlier.

Meanwhile, European stock markets remained higher. London’s FTSE 100 rose 0.1%, the EURO STOXX 50 tacked on 0.25%, France's CAC 40 advanced 0.15%, while Germany's DAX inched up 0.4%.

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