3 Dec 2014
UK services PMI points to decent 4Q GDP growth – ING
FXStreet (Barcelona) - The ING Research Team notes that the UK service sector purchasing managers’ index rose to 58.6, offering more support to 4Q GDP growth.
Key Quotes
“The UK service sector purchasing managers’ index offers more encouragement on 4Q14 GDP growth. The headline index has risen to 58.6 from 56.2 and with the manufacturing index also having risen on Monday (while the construction index fell yesterday) it leaves the composite PMI at 57.6 versus 55.8 previously – the consensus forecast was for a reading of 56.2.”
“In terms of the services survey, there were strong gains in new orders, which points to decent output growth in 1Q15, while the employment index rose further. Inflation pressures remain very subdued though, suggesting little imminent pressure for BoE policy action. Indeed, there is a growing prospect of a sub-1% inflation reading in January given the plunge in motor fuel costs and the ongoing supermarket price-war.”
“The survey compiler suggests that these figures are roughly consistent with GDP growth of 0.6%QoQ. We are more optimistic in terms of 4Q14 GDP, pencilling 0.8%QoQ, on the basis of a strengthening household sector and a rebound in investment.”
Key Quotes
“The UK service sector purchasing managers’ index offers more encouragement on 4Q14 GDP growth. The headline index has risen to 58.6 from 56.2 and with the manufacturing index also having risen on Monday (while the construction index fell yesterday) it leaves the composite PMI at 57.6 versus 55.8 previously – the consensus forecast was for a reading of 56.2.”
“In terms of the services survey, there were strong gains in new orders, which points to decent output growth in 1Q15, while the employment index rose further. Inflation pressures remain very subdued though, suggesting little imminent pressure for BoE policy action. Indeed, there is a growing prospect of a sub-1% inflation reading in January given the plunge in motor fuel costs and the ongoing supermarket price-war.”
“The survey compiler suggests that these figures are roughly consistent with GDP growth of 0.6%QoQ. We are more optimistic in terms of 4Q14 GDP, pencilling 0.8%QoQ, on the basis of a strengthening household sector and a rebound in investment.”