UK services PMI sees the weakest rise since the Brexit vote, a big miss

The services sector activity in the UK economy showed a much bigger drop in March when compared to the consensus forecast, a fresh report from Markit Economics showed on Thursday.

The services PMI plunged to 51.7 in March versus a 54.5 reading booked in February. Markets predicted an expansion to 54.0 last month.

Key Points:

Modest upturns in business activity and new work.

Employment growth slips to a three-month low.

The strong rate of input cost inflation continues in March.

Chris Williamson, Chief Economist at Markit, noted: “The UK economy iced up in March, suffering the weakest increase in business activity since the Brexit vote amid widespread disruptions caused by some of the heaviest snowfall in years. As a result, first quarter economic growth will likely have been adversely affected. The PMI surveys collectively signal a quarterly GDP growth rate of just under 0.3%, down from 0.4% in the fourth quarter, albeit with the rate of growth sliding to just 0.15% in March alone.”