UK Services PMI Completes Disappointment

For three days in a row, the release of UK economic indicators was again disappointing. On Wednesday (05 / July) this afternoon, data on the UK Services PMI index reportedly slowed to the lowest level in the last four months through June. GBP / USD also reacted by declining 0.13 percent to 1.2899 afterwards. While EUR / GBP is trading at 0.8762, with a weakening of Euro post ECB official statement, Benoit Coeure. The official market finance data from Markit revealed, UK Purchasing Managers Index (PMI) for the services sector fell to 53.4 in June, from 53.8 on month May. The result is indeed only slightly lower than the expected decline to 53.8 in May, and is still in the expansion category.

In the same report, it also said that the optimism of British companies slumped to the lowest level since late June, after last month's parliamentary election resulted in renewed political unrest. Brexit negotiations are suspected to be deviated from the initial plan compiled by PM Theresa May.

Next Quarter, UK Economy Could Slow Down
Markit said that his view of the UK economic outlook remained weak, although seen growth in the financial services sector and business services. If traced from UK PMI index data that has been released earlier, Markit concluded there will be a possibility of economic slowdown in the next few months.

"The slowdown in service sector growth complements the disappointing 'trio' of British PMI (manufacturing, construction and service) data," said Chris Williamson, chief economist at Markit, cited by Investing. "Given the downturn in predictions of future UK economic indicators, such as firm optimism and order book growth, the risk will be leaning towards a slowdown in the third quarter,"

In the first quarter, UK economic growth slowed as consumers were hit by slower salary growth amid rising inflation, due to the sagging pound sterling since Brexit's decision last year.