UK private sector activity falls to 14-month low in June

Britain's private sector activity declined to its weakest level in 14 months in June, according to the latest S&P Global flash UK composite purchasing managers' index. The index posted a reading of 49.4, down from 49.7 in May and below the 50.0 mark that separates growth from contraction.

The services sector recorded its weakest performance in three years with a PMI of 48.7. Firms cited rising costs linked to the Middle East conflict and domestic policy uncertainty as factors weighing on customer demand.

Manufacturing offset Manufacturing output rose during the month as companies built safety stocks ahead of potential price increases. New orders in the sector nevertheless fell to a six-month low. Businesses continued to raise prices they charge customers, though the rate of increase eased slightly from May. Input costs remained elevated despite a modest moderation.

Outlook statements "A disappointing June 'flash' PMI indicates that the economy contracted for a second successive month, albeit at only a 0.1 per cent rate," Chris Williamson, chief business economist at S&P Global Market Intelligence, said. Thomas Pugh, chief economist at RSM UK, stated that the data suggest the economy stagnated across the second quarter and that growth is unlikely to strengthen substantially through the rest of the year.