“UK PMIs contrasted with the Eurozone’s, showing a decline in the composite PMI to 52.8 in May (from 54.1), driven by a sharp drop in the index for the key services sector (to 52.9 from 55.0).
“The decline was partly offset, however, by the improvement in the manufacturing sector. The output index rose to its highest level in over two years (52.7), while the manufacturing PMI returned above level 50, which separates expansion from contraction after a brief drop in April.
“Overall, the data, while somewhat disappointing, continues to point to expansion in the British economy in the second quarter. Investors largely shrugged off the news, with the pound selling off marginally after the release. Today’s report is unlikely to sway the BoE one way or the other as it lacks very strong undertones, and markets are primarily focused on inflation.”
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