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Analysts at TD Securities note that the UK services PMI fell from 50.6 to 49.5 in September (mkt 50.3), unexpectedly falling into contraction territory.

Key Quotes

“And like its manufacturing and construction counterparts earlier in the week, the survey noted the fastest rate of job shedding in the services sector since August 2010. The Markit report also “provided evidence that international clients had switched business to other markets amid increased concerns around a potential no-deal Brexit.”

“The report mentions that the poor PMI data “push the surveys further into territory that would normally be associated with policy stimulus from the Bank of England,” something that we agree with, and we’ll be watching comments from MPC members particularly closely over the rest of the month, to see how many of them may be thinking more seriously about rate cuts in the near-term.”