By Geoffrey Smith
Investing.com -- U.K. business activity hit a 17-month low in July, hurt by continued high labor costs and by the falling pound, according to a closely-watched business survey released on Friday.
The Composite Purchasing Managers Index compiled by S&P Global fell to 52.8 from 53.7 in June, with the manufacturing PMI falling to 52.2 and the services PMI falling to 53.3.
Both the main index and the two sectoral indices held up slightly better than expected, but the data do little to dispel fears that the economy will start to contract later in the year under the influence of Russia’s war in Ukraine and the after-effects of Brexit, which has hurt the U.K.’s trading performance.
"The slowdown in output growth mostly reflected softer demand, alongside ongoing capacity constraints arising from shortages of materials and staff," S&P said. "On a more positive note, latest data indicated that input cost inflation eased considerably since June and was the lowest for ten months."