Growth in Britain’s services sector has slowed more than expected, as hiring eased to its slowest pace since March 2014. This suggests the economic recovery weakened at the start of the second half of the year. The Markit services PMI dipped to 57.4 in July from 58.5 in June, still indicating expansion among services businesses.
Taking into consideration this week’s manufacturing and construction surveys, the reading points to economic growth of 0.6% in the three months to July is slightly lower than the 0.7% reported by the Office for National Statistics for the three months to June.
Tuesday evening the dollar rose to its highest level in over three months after hawkish comments from a voting member of the US Federal Reserve’s policy setting committee. Atlanta Fed president Dennis Lockhart said there would need to be a significant deterioration in economic activity to hold the Fed back from raising rates in September.
The ADP Employment estimate was disappointing yesterday coming in at 185k. The consensus was for a rise to 215k. This was the smallest increase since April and is the fourth reading below 200k this year in comparison to last year it was below 200k only once.
In July the service sector in America indicated a slight rebound in service sector activity growth, following the five-month low recorded in June. The latest survey also highlighted a strong and accelerated rise in new work, alongside a further robust upturn in payroll numbers. At 55.7 in July, the index picked up from 54.8 in June and remained above the neutral 50.0 threshold for the twenty-first consecutive month.
The Markit Eurozone PMI Composite Output Index posted 53.9 in July, down from 54.2 in June and above the earlier flash estimate of 53.7. Solid expansions of output were signaled in both the manufacturing and service sectors, with the slightly faster rate of growth in service providers.
Spain registered the best rate of economic growth of the big-four Eurozone nations, with the pace of expansion moving back towards April’s 101-month record.
In Greece, Prime Minister Alexis Tsipras says the country is on the final stretch of concluding a deal with its creditors. Despite difficulties, he is is hopeful the deal will end the uncertainty surrounding the future of Greece and the Eurozone. An agreement or a bridge loan must be agreed by Aug. 20, when a 3.5 billion euro debt payment to the European Central Bank is due. Both sides have said such a deal is possible, although the European Commission described the target as ambitious, suggesting much remains to be done.
12:00 – GBP: Bank of England Minutes
12:00 – GBP: Bank Of England Quarterly Inflation Report
12:00 – GBP: Bank of England Governor Mark Carney speech
12:00 – GBP: Bank of England Vote Hike Expected to be 7-2 in favor of remaining unchanged
13:30 – USD: Initial jobless Claims expected to rise to 273k from 267k