Summary

• The headline Composite PMI Output Index edged lower from 49.7 in May to 49.4, according to the preliminary ‘flash’ reading.
• Weakness was again centered on the service sector, where business activity fell for a second month in a row and at a rate not seen since January 2023.
• High cost pressures – both from the war and prior government policies – were reported as playing a key role in driving employment lower in June, according to survey contributors.
• The release of flash PMI data comes on the heels of the Bank of England’s decision to keep its main policy rate on hold in June, with just two of the nine rate setters voting to hike interest rates.

A disappointing June ‘flash’ PMI indicates that the economy contracted for a second successive month, albeit at only a 0.1% rate and merely flat-lining over the second quarter as a whole.

Price pressures remain