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- FTSE 100 falls 10 points
- GSK leads risers after out-of-court settlement
- UK retail sales and consumer confidence improve
PMI suggests services inflation remains stubborn
Backing up the CPI data from earlier in the week, and with the Bank of England confirming services sector inflation is one of its main worries,
The June data highlighted contrasting inflationary pressures in the manufacturing and service sectors, says S&P, which carries out the surveys.
Manufacturing companies signalled an outright reduction in factory gate charges for the first time in more than seven years, it noted.
Service providers, meanwhile, recorded more steep rises in average prices charged, with the rate of inflation slightly softer than in May - at its lowest for 25 months but still steeper than at any other time since the summer of 2008.
Total input cost inflation across both sectors was the softest since February 2021, with prices charged inflation easing only slightly.
Manufacturing output charges declined fractionally, more than offset by a further sharp rise in prices charged by service sector companies.
Around 25% of service providers in the survey reported a rise in their output charges in June, while 4% noted a fall.
"Reports from survey respondents suggested that strong wage pressures remained by far the biggest factor leading to higher average prices charged across the service economy," the report said.
PMI data disappoints
UK PMI data indicated business activity increased for the fifth consecutive month in June, but was lower than expected and showed slight falls in inflation.
Both the services sector and manufacturing components of the S&P Global/CIPS UK PMI update for June came in below the consensus forecast.
The services PMI for June printed at 53.7, down from 55.2 the month before and below the 54.8 average economist estimate. A number above 50 indicates economic expansion, while those in the 40s and below point to recession.
The manufacturing PMI fell to 46.2 from 47.1, missing the expected 46.8.
Putting the two together, the composite PMI measure was 52.8, down from 54.0 and below the expected 53.6.
S&P said it showed a "solid upturn" in the service economy, whereas manufacturers "continued to underperform".
Chris Williamson, economist at S&P Global Market Intelligence, said: “June's flash PMI survey indicates that the UK economy has lost momentum again after a brief growth spurt in the spring, and looks set to weaken further in the months ahead.
"Most notably, consumer spending on services, which was a core growth driver in the spring, is now showing signs of faltering as the reality of higher interest rates, the increased cost of living and gloom about the outlook sets in and overrides the brief boost to spending enjoyed from the pandemic tailwind.
"The manufacturing sector meanwhile continues to report recessionary conditions."
Following the release the FTSE index continued to pare losses, now down just under 13 points. The FTSE 250 meanwhile, more of a domestically focused index, remained largely unmoved, down 69 points or 0.4% at just under 18,259.
Cold water poured on Ocado
Some comment on Ocado (LON:OCDO) from Shore Capital's head of consumer research Clive Black, after the online grocery group's shares rocketed yesterday on recycled reports about potential bid interest from Amazon (NASDAQ:AMZN) or another tech giant.
"To be clear, we do not know if there is something going on in terms of a present bid for Ocado. However, in light of the quite notable share price movement, we would be amazed if the UK Takeover Panel had not been in-touch with both Amazon and Ocado to seek clarification as to the veracity of this story line," said Black in a note to clients this morning.
"That there was no announcement from either party on the 22 June or on the morning of there 23rd, suggests to us that there was nothing to report and as such other factors must be at play."
It is the biggest faller on the Footsie
Savings rates going up, FTSE still down
Interest rates are in focus for markets, mortgage holders and savers after the Bank of England hiked again yesterday.
Investec has announced that after the Bank of the interest rate on its fixed rate saver account to 5.68%.
The FTSE 100 meanwhile has fallen to below 7450 but is trying to pare losses.