UK Final Services PMI revised sharply higher to 53.4 in May vs. 51.8 expected

• UK Final Services PMI upwardly revised to 53.4 in May.
• GBP/USD keeps its recovery mode intact above 1.2500 on the upbeat data.
• Eyes on broader market sentiment and mid-tier US economic data.

The UK services sector activity expanded more than expected in May, the final report from IHS Markit confirmed this Tuesday. 

The seasonally adjusted S&P Global/CIPS UK Services Purchasing Managers’ Index (PMI) was revised higher to 53.4 in May versus 51.8 expected and a 51.8 – last month’s flash reading.

Key points

Tim Moore, Economics Director at S&P Global Market Intelligence, which compiles the survey

“May data illustrate a worrying combination of slower growth and higher prices across the UK service sector. The latest round of input cost inflation was the steepest since this index began in July 1996, while the monthly loss of momentum for business activity expansion was a survey record outside of lockdown periods.”

"There were bright spots in customer-facing parts of the economy during May, buoyed by a rapid recovery in consumer spending on travel, leisure and entertainment.”

FX implications

GBP/USD is off the daily highs but defends 1.2500 on the upbeat UK data. The spot is down 0.17% on the day.