• Composite PMI 52.1 vs 52.8 prelim

High inflation continues to dampen demand conditions in the UK economy, with the services sector returning its worst performance since February 2021. Output growth was the slowest in the past 17 months as the cost-of-living crisis continues to deepen. Meanwhile, business confidence remains subdued and was the second-lowest since May 2020. S&P Global notes that:

“UK service providers reported their worst month for business activity expansion since the national lockdown in February 2021. Reduced levels of discretionary consumer spending and efforts by businesses to contain expenses due to escalating inflation have combined to squeeze demand across the service economy. The near-term outlook also looks subdued, as new order growth held close to June’s 16-month low and business optimism was the secondweakest since May 2020.