Activity in the British services sector expanded at its fastest pace in nearly a year in June, according to a survey published on Thursday.
S&P Global’s UK Services Purchasing Managers’ Index (PMI) rose to 52.8 in June from 50.9 in May. This figure exceeded the preliminary estimate of 51.3 for the month.
The June figure represents the strongest growth rate in the services sector since August 2024, indicating a significant improvement in activity.
This positive data from the services sector, which accounts for a large part of the UK economy, is expected to be welcomed by the Bank of England when assessing economic conditions.
EU services sector
The economic situation in Europe remains mixed, and today’s data flow will help clarify the picture. On Friday morning, the final business activity indices for the leading eurozone countries for June will be published. Preliminary estimates pointed to a slowdown in growth: in Germany and France, the Services PMI fell closer to 50, signalling stagnation in the services sector amid high interest rates.
Inflation dynamics in Europe give regulators cause for cautious optimism. According to preliminary data, consumer inflation in the eurozone slowed to 2.0% y/y in June, coming close to the European Central Bank’s target level. This is largely the result of lower energy prices and the high base effect from last year.
However, core inflation (excluding food and energy) remains above 5%, which is still well above the target and a cause for concern for the central bank. Against this backdrop, investors are eagerly awaiting the publication of the minutes of the ECB’s latest meeting. The ECB’s meeting materials will examine the nuances of the regulators’ discussion: whether opinions were divided on further rate hikes and whether the conditions for a possible pause in the tightening cycle were discussed.
