UK services PMI rebounds to 51.3 in February, a positive surprise

The UK services sector activity witnessed an unexpected upturn in the month of February, the latest survey report from Markit Economics showed this Tuesday.

The headline seasonally adjusted IHS Markit/CIPS UK Services PMI Index jumped to 51.3 in February vs. 50.1 booked in the previous month while surprising the markets to the upside (49.9 expected).

Key Points:

Modest upturn in service sector output in February.

Slight fall in new work.

Staffing levels drop to greatest extent for over seven years.

Chris Williamson, Chief Business Economist at IHS Markit, which compiles the survey, noted:

 “The latest PMI surveys indicate that the UK economy remained close to stagnation in February, despite a flurry of activity in many sectors ahead of the UK’s scheduled departure from the EU. The data suggest the economy is on course to grow by just 0.1% in the first quarter.”

“Worse may be to come when pre-Brexit preparatory activities move into reverse. Many Brexit-related headwinds and uncertainties also look set to linger in coming months even in the case of PM May’s deal going through. Global economic growth meanwhile remains sluggish, adding an increasingly gloomy backdrop to the UK’s current problems.”