Chief Business Economist Chris Williamson of S&P Global Market Intelligence has noted that the impact of the cost of living crisis, higher rates, export losses, and economic outlook concerns on demand is growing, leading to companies reporting declines in orders for goods and services.
Despite continued elevated cost pressures, mainly due to wage increases, the deteriorating demand environment is constraining firms’ pricing power.
The pace of growth in prices for goods and services is in line with consumer price inflation easing to 4% in the coming months.
Meanwhile, further reductions in employment numbers in August signal waning momentum in the labor market, which is likely to alleviate wage pressures.
While the possibility of further rate hikes in September exists, August’s PMI data adds to speculation that interest rates might soon reach their peak.
