The British service sector returned to warm growth last month after fears of US President Donald Trump’s tariff caused this sector to shrink in April for the first time in one and a half years, a survey showed on Wednesday.
The S&P Global Purchasing Manager Index for the British service sector rose to 50.9 in May from 49.0 in April, and above the previous flash estimate of 50.2.
The upward revision also raised the combined PMI, which included a smaller manufacturing sector, taking it on the 50 sign that divided the growth from the contraction.
“Concerns receding about US tariffs, restoring global financial markets and greater trust among clients all help support output growth,” said S&P Global Economy Director Moore Team.
The sharp decline in April export orders substantially reversed itself while the new order as a whole also dropped at a slower level from the previous month, helping to lift expectations for future output to the highest since October.
The British economy grew with a stronger 0.7%
PMI indeed shows sustainable pressure on the business of labor costs, reflecting the increase of almost 7% in the minimum wage and increasing the contribution of national insurance entrepreneurs, both of which most influence companies that use large a large number of staff with low -time paid staff.
Business has cut the number of staff in each of the last eight months – mostly by not replacing staff who leave – although the rate of decline may be the smallest in six months.
The company’s costs rose less than in April but still quickly, which they were mostly associated with higher labor costs, while the price charged rose at the latest level in seven months due to increased competitive pressure.
That is the possibility of convincing the Bank of England, which is worried that fast wage growth will make it difficult to get inflation back to the 2%target.
Source: Reuters
