UK April flash services PMI 54.9 vs 52.9 expected | Forexlive

• Prior 52.9
• Manufacturing PMI 46.6 vs 48.5 expected
• Prior 47.9
• Composite PMI 53.9 vs 52.5 expected
• Prior 52.2

This follows a similar trend to the French and German reports earlier, where the services sector is seen picking up while the manufacturing sector is slumping further instead. On the balance of things, the improvement in services activity is still a net positive for the UK economy (which depends more on it) and is a welcome signal for the BOE at least. S&P Global notes that:

“The fastest rebound in private sector output in a year
showed businesses were enjoying the pockets of recovery
emerging in the UK economy and activity levels leapt up
as a result of new orders and improved supply chain
performance. However, the difference between the
manufacturing and service sectors was stark.

“Services saw the fastest new order growth for 13 months
as consumer confidence grew and spending on a few more
luxuries increased. Whereas the manufacturing sector
received another body blow and became more entrenched
in contraction with a fall in new orders and another round
of job shedding. Stronger supply chain deliveries boosting
operations was not even enough to improve
manufacturers’ fortunes as consumers chose holidays
over white goods.

“With another interest rate rise predicted for next month to
cool inflation this may provide some respite in the months
to come. However, the higher salary payments demanded
by skilled workers will remain part of the business
landscape and rising borrowing costs may not take the
heat out of the economy just yet.”