Did the UK Election Impact Its Services PMI in June 2017?
UK Services PMI in June
According to a report by Markit Economics, the final UK Services PMI (Purchasing Managers’ Index) stood at 53.4 in June 2017 compared to 53.8 in May. The figure didn’t meet the market expectation of 53.5.
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The fall in the services PMI in June is mainly due to the decline in new business orders and export orders during the month. Production output also improved at a slower rate in June. However, job growth rose to a 14-month high. The main factor that hampered the services PMI was domestic demand.
UK election outcome
The outcome of the UK’s (EWU) general election in June 2017 created a swing in its political environment. Instability in the political environment had a negative effect on consumer confidence and dragged down domestic demand.
Negotiations for the Brexit are continuing in the United Kingdom. Many policymakers warn that the country is heading for a “hard Brexit.” On June 23, 2017, the Brexit vote marked its one-year anniversary. Many events have taken place during that year. The United Kingdom posted weaker growth in 1Q17. Weaker consumer confidence and household spending hampered economic growth that quarter.
In the next part of this series, we’ll analyze the performance of the Japan Services PMI in June 2017.