For August
Provided by: Chartered Institute of Purchasing and Supply (sub'n req'd)

Activity in the services sector contracted for the 4th straight month, but the PMI did not continue to fall lower as was forecast. Instead, the PMI increased from July's 47.4 to register a 49.2 for August. The data is similar to the manufacturing PMI which also, though in contraction for a 4th straight month, surprised forecasts on the upside. Both sectors are facing slower growth as the economy deals with the global credit crunch, low consumer confidence, high oil prices and slowing growth in the US. 

The Pound has been falling sharply this past month. The bank of England meets tomorrow, but even though it has cut rates 3 times since December, they are unlikely to further reduce rates until inflation comes down from its high levels.

For July
Provided by: Chartered Institute of Purchasing and Supply (sub'n req'd)

An index of activity in the services sector, which surveys about 700 firms, stayed below the 50 level, marking another month of contraction. The headline number improved slightly from last month, which means the fall in activity was not as acute as in June, but the data is nothing to get excited over.

The Pound fell below 1.96 versus the Dollar overnight, as industrial production data disappointed. That's the lowest level in nearly 7 weeks. The Bank of England Monetary Policy Committee will meet on Thursday and look at reports showing weak services, manufacturing, housing, construction, and anemic financial lending. There does not seem to be light at the end of the tunnel either at this point, and the one thing that can come out of this period of slowdown is if inflation cooled. It's interesting to see how long the policy members will let economic growth suffer in order to meet their inflation targets.

GBP/USD - Pound Falls to 7 Week Low vs Dollar Prior to FOMC Statement:  The Pound-Dollar was pressured by its fundamental data and Dollar strength prior to the FOMC meeting. The pair fell 80 pips in favor of the greenback, breaking support at 1.96. This put it at a new 7-week low.  

Through May
Provided by: Office of National Statistics

Uk services growth for the 3 months through May were up 0.4%, matching expectations and slighly better than the figure in the 3 months through April. Still, the trend of growth is slow as the report mentions. In today's GDP report, services for the 2nd quarter were up 0.5%.  

From the Release: "Services output rose by 0.4 per cent in the three months to May compared with the three months to February. The headline rate of growth of services has remained below 0.5 per cent for four months in a row. This is the first time this has happened since the start of the series in 1995.

Services output between April and May fell by 0.1 per cent. Three of the five components of the service sector decreased in output. The most significant decrease was in government and other services."

For June
Provided by: Chartered Institute of Purchasing and Supply (sub'n req'd)

The UK services sector contracted in June for the second straight month, posting a 47.1 for its PMI. It's the weakest level since October 2001. The UK economy has hit the skids as a collapse in housing lending, stemming from the US sub-prime mortgage, has turned into a full blown slowdown. Record high oil prices are pushing up inflation, curbing spending by increasingly pessimistic consumers. The UK FTSE 100 Index closed near its 3 year low, as the economy is swerving towards a recession. Earlier this week, the Manufacturing PMI fell to 45.8, also the lowest since 2001. 

Through April
Provided by: Office of National Statistics

For May
Provided by: Chartered Institute of Purchasing and Supply (sub'n req'd)

The services sector in the UK fell into contraction in May. The report comes on the heels of a weak manufacturing PMI release earlier in the week and shows that conditions in the UK are deteriorating. Activity in services has been steadily declining the last 4 months, with 3 reports in a row coming in below forecasts. Today, expectations were for a 50.4 reading, similar to April. Services will be constrained as long as consumers feel pessimistic. Last summer's credit crunch has hit the UK economy especially hard as property values were vulnerable if financing dried up.

The Pound weakened against the Euro and Dollar following the release. With high inflation, the Bank of England, which meets tomorrow, cannot move to lower rates in order to help the economy.

Through March
Provided by: Office of National Statistics

From the Release: "Services output rose by 0.5 per cent in the quarter to March compared with the quarter to December. Four of the five components of the service sector increased in output; the most significant increases were in government and other services, business services and finance and distribution.

Business services and finance output rose by 0.4 per cent in the quarter to March. This was the smallest three months on previous three months increase since July 2003 (when there was an increase of 0.3 per cent). The most significant increase in the quarter to March was in other financial services (which includes stock exchange transactions). This was partly offset by a fall in other business services. This category includes legal services and architectural services and has a large weight within business services and finance."

For April
Provided by: Chartered Institute of Purchasing and Supply

Growth in the UK services sector slowed to the weakest pace in five years in April. The Services PMI indicator slipped 1.7 points to 50.4, much lower than expected by economists. The decline comes as a result of more restrictive access to credit for both households and businesses. The economy is facing some stiff headwinds as a result of a housing slump. Falling housing prices are curbing domestic demand. The Bank of England, worried about inflation, cannot cut rates at the same pace as the US did, with rates currently at 5% after 3 rate cuts since December. The BoE meets this week, and is expected to hold rates steady to combat inflation.

The Pound weakened vs the Dollar following the release hitting an intra-day low at 1.9634 around 5Am EST, but then recovered. and was weaker against the Euro heading into NY trading.

Through February
Provided by: Office of National Statistics

Services grew 0.6% in the 3 months through February, and were up 0.3% for the 1st quarter. This matches the slowest pace since the 1st quarter of 2005.

For March

Service activity cooled in March, with tthe PMI declining to 52.1 from February's 54.0. It was the lowest level since November. The UK is experiencing difficulty with the housing sector as banks are giving out less mortgages and potential buyers are being shut out of loans due to higher credit costs. Banks are not passing along recent interest rate cuts to the consumer. 

Through January
Provided by: Office of National Statistics

From the Release:

"Services output rose by 0.5 per cent in the three months to January compared with the three months to October. This was the smallest three months on previous three months increase since May 2005 (when output also increased by 0.5 per cent). The increase in the latest period was driven by business services and finance; government and other services; and transport, storage and communication."
 

Through December
Release from the Office of National Statistics

"Services output rose by 0.6 per cent in the quarter to December compared with the quarter to September. This was driven by increases in business services and finance, transport storage and communication and government and other services."