The UK services PMI survey showed a reading of 53.8 for May, falling from 54.3 in April and coming in weaker than economists had predicted at 54.1 , confirming investors view that the British economy is struggling to recover.
The data is compiled by Markit survey group on a monthly basis and is a Survey of purchasing managers which asks respondents to rate the relative level of business conditions including employment, production, new orders, prices, supplier deliveries, and inventories.
Sterling slipped to a four-week low against the Euro, edging down after the disappointing data. The Pound lost 12 pips, with the EURGBP pair climbing to 0.8879 from 0.8867 within twenty minutes, its highest since May 6,
Paul Smith, Senior Economist at Markit said that “UK service sector growth continued to slow in May. Although in part attributable to the extra bank holidays in late April, the sector has lost some underlying momentum in the past two months and, combined with the weaker trend in manufacturing highlighted earlier this week, PMI survey data presently point to a soft GDP reading for Q2.”
Against the Dollar, Sterling was reacted differently, initially spiked down then edged up from 1.6322 to 1.6334 in twenty minutes from the news release at 08:28 GMT.