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UK Services PMI Falls

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UK Services PMI Falls

After the slight fall in the UK’s Manufacturing Purchasing Managers Index (PMI) figure on Monday, Markit Economics have today released the Services PMI data. The headline PMI Services figure is 58.6 for the month of May, this compares to the 58.7 reading seen in April and is on the high side of the market anticipated 58.2. In conjunction with the Chartered Institute of Purchasing and Supply the Manufacturing and Services data is amalgamated by Markit Economics to produce a PMI Composite figure for the UK, the May reading of this figure is 59.0, this represents a slight drop on the previous April reading of 59.2 but comes in ahead of the 58.7 anticipated by market participants.

A minor piece of data also released in the UK this morning was the Change in the GBP Official Reserves. Measured in US Dollars this change on the month was -$613m compared to an increase of $139m in April.

Yesterday, the European Commission acknowledged the success of the British growth story but issued a series of economic recommendations to the UK authorities. Primarily, the Commission has noted the UK housing bubble and suggested an increase in both taxes on high valued homes and also on the base council tax which it claims is calculated using house valuations from over 20 years ago.

Additionally, the European Commission has called for Britain to address it’s lackluster infrastructural investment program, noting that failing to do so would prove to be an impediment to long term growth.

Whether the UK adopts either of the above policies remains to be seen, but it will not be done at the behest of the European Commission. British lawmakers, which are hesitant towards Europe at the best of times, have become incensed at the Commissions interference in their domestic economy particularly given the relative underperformance of the European economic record.

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