U.K. Services PMI Falls as Brexit Worries Hit Sector
Growth in the U.K. services sector was hit in the run-up to the June 23 Brexit referendum. Markit's services purchasing managers' index released today fell to 52.3 in June from 53.5 in May. The consensus expectation was for an index reading of 52.7.
A measure above 50 signals growth activity compared with the previous month.
The closely watched gauge was at its lowest level since April. Growth over the second quarter was the lowest since the first quarter of 2013, averaging 52.7. The index has averaged 55.2 since it was first compiled in July 1996.
The outlook for the year was the darkest since December 2012, according to Markit, with companies reporting uncertainty linked to the referendum weighing on workloads and incoming new business.
The Markit survey found that new business received by U.K. services providers rose slightly faster in June but was the second-weakest reading in more than three years, with businesses reporting postponed or cancelled orders due to the referendum.
Markit's chief economist Chris Williamson said in a statement, "The PMI surveys indicate that the ace of U.K. economic slowed to just 0.2% in the second quarter, with further loss of momentum in June as Brexit anxiety intensified."
Williamson added that hiring has been hit as firms have lack of clarity on the economic outlook. The U.K. economy expanded by 0.4% in the first quarter.
A slew of Markit purchasing managers' indices out today included upward revisions in the eurozone composite and services PMIs for June. The composite index held steady at 53.1, compared with an initial estimate for a fall 52.8, while the services index eased to 52.8 from 53.3, better than the 52.4 reading estimated in Markit's June 23 "flash" report.
The FTSE 100 was recently down 0.71% at 6,476.13.