- UK Final Services PMI upwardly revised to 59.6 in July.
- GBP/USD remains uninspired near 1.3930 on the UK data.
- Eyes on US ISM Services PMI as the USD rebounds.
The UK services sector activity expanded more than expected in July, the final report from IHS Markit confirmed this Monday.
The seasonally adjusted IHS Markit/CIPS UK Services Purchasing Managers’ Index (PMI) was revised up to 59.6 in July versus 57.8 expected and a 57.8 – last month’s flash reading.
Key points
Weakest rise in business activity since March.
Strongest input cost inflation in 25 years of data collection.
Staff shortages constrain business capacity and recruitment.
Tim Moore, Economics Director at IHS Markit, which compiles the survey
“July data illustrates that recovery speed across the UK economy has slowed in comparison to the second quarter of 2021. More businesses are experiencing growth constraints from supply shortages of labor and materials, while on the demand side we've already seen the peak phase of pent-up consumer spending.
"The full easing of pandemic restrictions appears to have helped limit the overall loss of momentum towards the end of July. At 59.6, the PMI reading for services output was much stronger than our earlier 'flash' figure of 57.8 in July, largely due to the final index covering an extra five working days since 'Freedom Day'.”
FX implications
GBP/USD was little changed on the upbeat UK data, keeping its range around 1.3930 following a retreat from the daily highs of 1.3947 seen in the last hour. The spot is still up 0.09% so far.