UK Growth Stumbles as Services PMI Slips Into Contraction

UK flash services PMI fell short of expectations, whereas flash manufacturing PMI was still expanding but also slowed from the previous month. While manufacturing came in at 53.1—below the earlier 53.9 but still above 50—services dropped to 48.7 as opposed to the 50.1 expected, therefore indicating contraction and the steepest decline since January 2023.

The read-through shows that UK economic growth slowed down in June; manufacturing just partially counterbalanced the slowdown while services were clearly the weaker link. Usually, that combination signals weaker internal demand, persistent cost pressure, and less favorable conditions for the Bank of England than markets had projected.