6 May | Other

The UK services sector shrinks at its fastest pace since 2023

The UK services sector shrinks at its fastest pace since 2023

The UK services sector contracted in April at its fastest pace in two years, marking the first decline since October 2023. The sector accounts for the majority of the country's economy.

The UK Services PMI fell from 52.5 in March to 49.0 in April. The Composite PMI, which combines services and manufacturing survey data, declined from 51.5 to 48.5 over the same period.

As S&P Global states, accelerating labor market inflation reflects both the near 7% minimum wage hike and additional payroll taxes introduced by UK Chancellor Rachel Reeves. Meanwhile, employment levels have now declined for seven consecutive months.

According to the S&P Global survey, UK manufacturing export orders dropped at their fastest pace since May 2020.

The Bank of England is expected to cut its rate by 25 basis points from 4.5% to 4.25% on Thursday, May 8.

In April, the International Monetary Fund (IMF) downgraded its 2025 UK growth forecast from 1.6% to 1.1%. However, the IMF noted that Britain’s economy will still outpace most European peers.

Period: 19.05.2025 Expectation: 1000 pips
AUDUSD bounces off 0.635 support level toward 5-month high
Today at 09:38 AM 4
Period: 22.05.2025 Expectation: 89500 pips
BTCUSD correction wave forms sell signal targeting 93,700
Today at 08:47 AM 7
Period: 20.05.2025 Expectation: 4065 pips
Optimism for Tesla is limited by weak sales and competition
Today at 05:07 AM 7
Period: 16.05.2025 Expectation: 700 pips
Silver prices started to rebound toward 33.6
Yesterday at 11:15 AM 39
Period: 13.05.2025 Expectation: 900 pips
USDJPY seen retreating to 145.00
Yesterday at 09:38 AM 20
Period: 18.05.2025 Expectation: 3085 pips
Trading optimism and technical signal reinforce S&P 500's upside outlook
Yesterday at 08:18 AM 39
Elena_Dorokhina
Elena_Dorokhina

Listed among the best MarketCheese authors
1st in the segment "Currencies"
Go to forecasts