UK services PMI returns to expansion in Aug, largest jump on record

The services sector activity in the UK economy staged a solid rebound in August, with markets completely shrugging-off Brexit concerns, a fresh report from Markit Economics showed on Tuesday. The rebound was seen as the strongest on record. 

The services PMI jumped to 52.9 in August, rebounding sharply from a massive drop to 47.4 in July following the Brexit referendum in June. Markets predicted a rise to 50.0 in August.

Chris Williamson, Chief Economist at Markit, noted: “A record rise in the services PMI adds to the encouraging news seen in the manufacturing and construction sectors in August to suggest that an imminent recession will be avoided.”

“The three PMI surveys point to a stagnation of the economy so far in the third quarter, meaning much hinges on the September data to see whether the economy contracts or ekes out modest growth. It remains too early to say whether August’s upturn is a dead cat bounce or the start of a sustained post-shock recovery, but there’s plenty of anecdotal evidence to indicate that the initial shock of the June vote has begun to dissipate.”