Bank of England questions asked about decision to raise interest rates
Growth in British services companies slowed in July by more than expected.
This is raising further questions about the Bank of England’s decision to raise interest rates before Brexit, a survey showed.
The IHS Markit/CIPS UK Services Purchasing Managers’ Index (PMI), a closely-watched gauge of economic activity, dropped to a three-month low of 53.5 in July from 55.1 in June.
Although staying comfortably above the 50 mark signifying growth, July’s score was weaker than all forecasts in a Reuters poll of more than 30 economists.
Some companies in the survey attributed the slowdown to a summer heat wave and soccer’s World Cup, which kept consumers away from their businesses.
There were also signs that uncertainty around Brexit had held back new business.
Earlier on Friday, BoE Governor Mark Carney warned that Britain faced an “uncomfortably high” risk of leaving the European Union with no deal. His comments drove sterling to an 11-day low against the dollar.
The survey comes a day after the BoE raised interest rates to a new post-financial crisis high of 0.75 percent in part because it took the view that the economy had recovered momentum after a weak start to the year caused by unusually bad weather .
Business groups were critical of the decision, and Friday’s PMI — which BoE officials typically get in advance of their policy decision — will do nothing to assuage their concerns.
Published: by Radio NewsHub