UK Services PMI Rises, Pointing Steadiness of Economic Growth in Q3
UK economic data continue to show steadiness of the economy in Q3, despite Brexit uncertainties. Employment intentions in the services sector rose to a six-month high, but confidence for the year ahead slipped to its lowest since March, as businesses said Brexit uncertainty had made clients less willing to invest. The IHS Markit/CIPS Purchasing Managers' Index (PMI) rose to 54.3 in August from 53.5 in July, beating forecasts economists (53.9).
Firms in the PMI survey reported paying higher salaries to recruit hard-to-find staff and reduce employee turnover that was limiting their ability to complete some projects. Official data showed record vacancies and unemployment at a 43-year low in July, but this has not translated into widespread pay rises for the workforce as a whole.
Britain's economy has slowed since the June 2016 Brexit vote. The UK's exit from the European Union has already cost the UK a chunk of its economic output. According to economists, Britain’s gross domestic product (GDP) is already 2.1% lower in level terms than where it would have been without Brexit.