CIPS Chief Economist John Glen Comments on UK Services PMI

Growth in the services sector was sluggish in July, with overall output rising at the slowest pace since January, while expansion of new orders also slumped to a six-month low.

The weaker fundamentals of the UK economy, while the services sector has entered a period of inertia, were the drivers of this poor outcome.

In response to summer interest rate hikes, companies are rethinking investment plans, focusing on paying higher wage bills and maintaining brutal operating costs rather than expanding product portfolios.

In turn, job creation numbers started to soften as companies kept capacity at peak capacity within their cost constraints and in light of a possible recession at the end of the year.