The services sector activity in the UK economy extended its rebound in the month of June, and surprised markets to the upside, a fresh report from Markit Economics showed on Wednesday.
The services PMI jumped to 55.1 in June versus a 54.0 reading booked in June. Markets predicted 54.0 last month.
Key Points:
The robust and accelerated upturn in business activity.
New work increases at the fastest pace for 13 months.
Input cost inflation intensifies in June.
Chris Williamson, Chief Economist at Markit, noted: “Stronger growth of service sector activity adds to signs that the economy rebounded in the second quarter and opens the door for an August rate hike, especially when viewed alongside the news that inflationary pressures spiked higher.”
“The survey data indicate that the economy likely grew by 0.4% in the second quarter, up from 0.2% in the opening quarter of 2018. The sharp rise in business costs, linked to surging oil prices and the need to offer higher wages, suggests inflation will also pick up again from its current rate of 2.4%.”
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