Expansion in the UK private sector slowed in June, with a notable impact from the upcoming general election, according to surveys. The slowing growth was particularly evident in the services sector, with both new business intakes and job creation easing. Despite this, firms’ cost pressures remained high, though the rate of output price inflation increased slightly.
The seasonally adjusted S&P Global UK services PMI business activity index remained in expansionary territory in June, but fell to its weakest level since last November. The composite output index, which combines manufacturing and services surveys, also showed a slowdown to a six-month low.
Joe Hayes, principal economist at S&P Global Market Intelligence, noted that the slowdown may be attributed to a “pre-election seize up,” as clients adopted a “wait-and-see” approach before placing orders. Despite this, Hayes remains optimistic about another quarter of GDP growth, albeit less dynamic than the first quarter.
In other news, Irish video game services company Keywords Studios has accepted a bid from Swedish private equity firm EQT, valuing the business at £2.1bn. Investors will receive £24.50 per share in cash. Keywords, which has worked on popular games like Fortnite and Call of Duty, has seen rapid expansion since its listing on the London Stock Exchange in 2013.
Overall, economic indicators suggest a cautious approach in the private sector amid political and economic uncertainties, but with potential for continued growth in the UK economy.
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