UK Preliminary Services PMI plunges to 51.8 in May vs. 57.3 expected

UK Manufacturing PMI drops to 54.6 in May, misses estimates.
Services PMI in the UK comes in at 51.8 in May, a big miss.
GBP/USD drops sharply to 1.2515 on awful UK Preliminary PMIs.

Dhwani Mehta FXStreet

The seasonally adjusted S&P Global/CIPS UK Manufacturing Purchasing Managers’ Index (PMI) drops sharply to 54.6 in May versus 55.1 expected and 55.8 – April’s final reading.

Meanwhile, the Preliminary UK Services Business Activity Index for May slumped to 15-month lows, arriving at 51.8 versus April’s final readout of 58.9 and 57.3 expected.

Chris Williamson, Chief Business Economist at S&P Global, commented on the survey

“The UK PMI survey data signal a severe slowing in the rate of economic growth in May, with forward-looking indicators hinting that worse is to come. Meanwhile, the inflation picture has worsened as the rate of increase of companies' costs hit yet another all-time high.“

“The survey data therefore point to the economy almost grinding to a halt as inflationary pressure rises to unprecedented levels.”

FX implications

Poor UK Preliminary Manufacturing and Services PMIs took the steam out of the GBP/USD rally, as the pair changed course in a knee-jerk reaction.

The spot is trading at 1.2514, down 0.57% at the time of writing. Before the UK PMIs release, cable was trading firmer around 1.2590.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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