This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at https://www.theguardian.com/business/live/2016/sep/05/services-sector-pmi-expected-to-ebound-after-brexit-shock-business-live

The article has changed 9 times. There is an RSS feed of changes available.

Version 4 Version 5
Post-Brexit recession fears fade as service sector rebounds - business live Post-Brexit recession fears fade as service sector rebounds - business live
(35 minutes later)
1.03pm BST
13:03
Time for a quick round-up of how Europe’s stock indices were doing by lunchtime, starting with a rather lacklustre FTSE 100.
The blue-chip index edged downwards after strong PMI data boosted the pound. Many of the biggest firms in the FTSE 100, such as oil companies and miners, earn their money in dollars, while the stronger data has made further stimulus measures from the Bank of England less likely.
European markets are faring a little better though.
To anyone waiting for news of Wall Street’s opening performance, don’t bother. It’s Labor Day in the US, which means stock markets are closed.
Updated
at 1.09pm BST
12.41pm BST
12:41
As Theresa May attends the G20 meeting in China, where the fraught Hinkley Point nuclear project is likely to be on the agenda, another Chinese investment in the UK is afoot.
Shanghai’s biggest property developer has pressed the button on plans to build an £800m tower in London and it is set to be western Europe’s tallest residential skyscraper.
But the snappily-titled Spire London is likely to ruffle feathers, given the gulf it exposes between the capital’s richest and poorest residents.
Updated
at 12.44pm BST
12.14pm BST12.14pm BST
12:1412:14
Shop prices show 2% deflation in AugustShop prices show 2% deflation in August
Time for an update on inflation data that came in overnight.Time for an update on inflation data that came in overnight.
Overall shop prices reported deflation of 2.0% in August, from the 1.6% decline in July, according to the British Retail Consortium (BRC)-Nielsen shop price index.Overall shop prices reported deflation of 2.0% in August, from the 1.6% decline in July, according to the British Retail Consortium (BRC)-Nielsen shop price index.
Non-food deflation picked up speed 2.5% from 2.2% in July, while food prices accelerated to a record low, down 1.1% from a declined of 0.8% in the previous two months.Non-food deflation picked up speed 2.5% from 2.2% in July, while food prices accelerated to a record low, down 1.1% from a declined of 0.8% in the previous two months.
BRC chief executive Helen Dickinson OBE said:BRC chief executive Helen Dickinson OBE said:
The devaluation of sterling in wake of the referendum will put upward pressure on shop prices. But that’s likely to take several months to properly feed through, given that retailers won’t feel the brunt of the cost increases until existing contracts with foreign suppliers come to an end.The devaluation of sterling in wake of the referendum will put upward pressure on shop prices. But that’s likely to take several months to properly feed through, given that retailers won’t feel the brunt of the cost increases until existing contracts with foreign suppliers come to an end.
Even then, retailers will have to make a decision about when and how much to pass onto consumers. Given the strength of competition in the market, and if the economy softens in line with predictions, any pass through may be more limited than implied by the exchange rate movement.Even then, retailers will have to make a decision about when and how much to pass onto consumers. Given the strength of competition in the market, and if the economy softens in line with predictions, any pass through may be more limited than implied by the exchange rate movement.
As far as they can, retailers will endeavour to mitigate impacts by looking for productivity gains in their own businesses, rather than compromising on the value they are offering to consumers.As far as they can, retailers will endeavour to mitigate impacts by looking for productivity gains in their own businesses, rather than compromising on the value they are offering to consumers.
12.05pm BST12.05pm BST
12:0512:05
Marks & Spencer confirms 500 jobs to goMarks & Spencer confirms 500 jobs to go
Marks & Spencer has admitted that it plans to cut up to 525 jobs from its head office and move a further 400 outside London in a bid to cut costs.Marks & Spencer has admitted that it plans to cut up to 525 jobs from its head office and move a further 400 outside London in a bid to cut costs.
Steve Rowe, M&S chief executive, said:Steve Rowe, M&S chief executive, said:
M&S has to become a simpler and more effective organisation if we are to deliver our plans to recover and grow our business.M&S has to become a simpler and more effective organisation if we are to deliver our plans to recover and grow our business.
The review highlighted that M&S has become too complex and inefficient and today’s proposals aim to address this by removing duplication, driving accountability and establishing clear, consistent processes; which in turn will strip out unnecessary costs.The review highlighted that M&S has become too complex and inefficient and today’s proposals aim to address this by removing duplication, driving accountability and establishing clear, consistent processes; which in turn will strip out unnecessary costs.
The stock market announcement is here and our story will be online shortly. Updated
at 12.46pm BST
11.46am BST11.46am BST
11:4611:46
Analysts are increasingly training their sights on the Bank of England, after strong PMI data suggested the Monetary Policy Committee may have moved too soon by cutting rates to 0.25% earlier this month.Analysts are increasingly training their sights on the Bank of England, after strong PMI data suggested the Monetary Policy Committee may have moved too soon by cutting rates to 0.25% earlier this month.
Some pundits are predicting red faces when MPC members go before the Treasury Select Committee on Wednesday.Some pundits are predicting red faces when MPC members go before the Treasury Select Committee on Wednesday.
Ranko Berich, head of market analysis at foreign exchange firm Monex, says:Ranko Berich, head of market analysis at foreign exchange firm Monex, says:
The Bank of England is now in an interesting position. This week’s testimony to the Treasury Select Committee will be a trial for MPC members. Having eased early and aggressively, the MPC will doubtlessly be asked by lawmakers if they jumped the gun, and will have to once again justify their previous warnings about the potential effects of Brexit.The Bank of England is now in an interesting position. This week’s testimony to the Treasury Select Committee will be a trial for MPC members. Having eased early and aggressively, the MPC will doubtlessly be asked by lawmakers if they jumped the gun, and will have to once again justify their previous warnings about the potential effects of Brexit.
But analysts at Capital Economics think the Bank will still move to cut rates in November, to a rock-bottom 0.1%.But analysts at Capital Economics think the Bank will still move to cut rates in November, to a rock-bottom 0.1%.
Scott Bowman, UK economist, says:Scott Bowman, UK economist, says:
Note that the MPC expects growth to be slightly positive in the second half of 2016 and the majority of members thought it would be appropriate to cut bank rate to its effective lower bound if their forecasts were met. Therefore, we continue to think the Committee will cut bank rate to 0.10% in November.Note that the MPC expects growth to be slightly positive in the second half of 2016 and the majority of members thought it would be appropriate to cut bank rate to its effective lower bound if their forecasts were met. Therefore, we continue to think the Committee will cut bank rate to 0.10% in November.
11.25am BST11.25am BST
11:2511:25
Oil price up ahead of Russia-Saudi Arabia statementOil price up ahead of Russia-Saudi Arabia statement
While UK eyes were on the services sector PMI data, the price of a barrel of Brent crude oil bubbled upwards in anticipation of a statement from Saudi Arabia and Russia at the G20 meeting in China.While UK eyes were on the services sector PMI data, the price of a barrel of Brent crude oil bubbled upwards in anticipation of a statement from Saudi Arabia and Russia at the G20 meeting in China.
In the end, two of the world’s largest oil producing nations didn’t have much to say.In the end, two of the world’s largest oil producing nations didn’t have much to say.
They have agreed to set up a joint task force to ensure greater stability in the oil market, after watching prices slump from $100 a couple of years ago to less than $30 earlier in 2016.They have agreed to set up a joint task force to ensure greater stability in the oil market, after watching prices slump from $100 a couple of years ago to less than $30 earlier in 2016.
The agreement could involve curbing supply to address a global oil glut.The agreement could involve curbing supply to address a global oil glut.
Brent crude was up by 2.75% to $48.12 in advance of the statement.Brent crude was up by 2.75% to $48.12 in advance of the statement.
UpdatedUpdated
at 11.35am BSTat 11.35am BST
11.09am BST11.09am BST
11:0911:09
New car sales up 3.3% in AugustNew car sales up 3.3% in August
More signs of strength in the economy now, as sales of new cars picked up again following a lacklustre performance in July.More signs of strength in the economy now, as sales of new cars picked up again following a lacklustre performance in July.
Sales rose by 3.3% year on year during August, according to the Society of Motor Manufacturers (SMMT), compared to a meagre 0.1% rise in July.Sales rose by 3.3% year on year during August, according to the Society of Motor Manufacturers (SMMT), compared to a meagre 0.1% rise in July.
Private car sales were down 0.2% but the slight decline was more than offset by a 7.7% rise in fleet car sales, as businesses showed they were still prepared to splash out on vehicles.Private car sales were down 0.2% but the slight decline was more than offset by a 7.7% rise in fleet car sales, as businesses showed they were still prepared to splash out on vehicles.
SMMT chief executive Mike Hawes said:SMMT chief executive Mike Hawes said:
August is traditionally one of the quietest months as consumers look ahead to the September plate change, so growth, albeit small, is good news. With showrooms full of exciting models featuring the very latest technology and a raft of affordable finance options, it still makes economic sense to consider buying a new car.August is traditionally one of the quietest months as consumers look ahead to the September plate change, so growth, albeit small, is good news. With showrooms full of exciting models featuring the very latest technology and a raft of affordable finance options, it still makes economic sense to consider buying a new car.
The key to maintaining this strong market is consumer confidence for which we look to government to deliver the conditions for economic growth.The key to maintaining this strong market is consumer confidence for which we look to government to deliver the conditions for economic growth.
Here’s a handy graph from the SMMT showing how car sales have performed since August 2000.Here’s a handy graph from the SMMT showing how car sales have performed since August 2000.
And here’s another handy graph, this time showing what the best-selling cars were in August and so far this year. It’s no surprise to find the Ford Fiesta motoring ahead.And here’s another handy graph, this time showing what the best-selling cars were in August and so far this year. It’s no surprise to find the Ford Fiesta motoring ahead.
11.04am BST11.04am BST
11:0411:04
A bit more reaction to the PMI data coming in now.A bit more reaction to the PMI data coming in now.
Here’s Martin Beck, senior economic advisor to ‘Big Four’ accountant EY’s economic forecasting group the ITEM Club:Here’s Martin Beck, senior economic advisor to ‘Big Four’ accountant EY’s economic forecasting group the ITEM Club:
A rise in the headline activity balance of the CIPS services survey exceeded economists’ expectations and represented the biggest monthly jump since the survey began in 1996.A rise in the headline activity balance of the CIPS services survey exceeded economists’ expectations and represented the biggest monthly jump since the survey began in 1996.
The details of the survey showed that a recovery in total activity was accompanied by a rise in new orders to a four-month high. Employment also expanded, following stagnation in July. But the inflationary consequences of a weaker pound appear to be making their mark in the services sector – input prices rose at the fastest pace in 33 months.The details of the survey showed that a recovery in total activity was accompanied by a rise in new orders to a four-month high. Employment also expanded, following stagnation in July. But the inflationary consequences of a weaker pound appear to be making their mark in the services sector – input prices rose at the fastest pace in 33 months.
The strong recovery in all three CIPS surveys in August suggests that the likelihood of a recession this year is looking more remote, in line with our view.The strong recovery in all three CIPS surveys in August suggests that the likelihood of a recession this year is looking more remote, in line with our view.
However, a composite PMI, which weights together the sectoral PMIs by their respective shares in the economy, points to an economy that will struggle to see much growth in Q3.However, a composite PMI, which weights together the sectoral PMIs by their respective shares in the economy, points to an economy that will struggle to see much growth in Q3.
Our expectation, allowing for the official and survey data available so far, suggests that GDP will expand by around 0.2%. So while the gloomier predictions around the EU vote are unlikely to be realised, the economy is not out of the woods yet.Our expectation, allowing for the official and survey data available so far, suggests that GDP will expand by around 0.2%. So while the gloomier predictions around the EU vote are unlikely to be realised, the economy is not out of the woods yet.
Kallum Pickering, senior economist at Berenberg, also thinks the UK will avoid economic contraction in the third quarter.Kallum Pickering, senior economist at Berenberg, also thinks the UK will avoid economic contraction in the third quarter.
The v-shaped recovery between July and August suits our above-consensus calls for the second half of the year that the UK will dodge a recession. If we take the July/August average of our weighted PMI for services, manufacturing and construction at face value, it points to stagnation in Q3.The v-shaped recovery between July and August suits our above-consensus calls for the second half of the year that the UK will dodge a recession. If we take the July/August average of our weighted PMI for services, manufacturing and construction at face value, it points to stagnation in Q3.
Importantly, whereas the PMIs indicated that the economy slowed in Q2 to a growth rate of around 0.2% quarter on quarter, official data showed the economy actually expanded by 0.6%. If we apply the same difference of +0.4ppt to the Q3 PMI prediction of 0.0%, it points to a significant upside risk to our already above-consensus forecast of 0.1% in Q3.Importantly, whereas the PMIs indicated that the economy slowed in Q2 to a growth rate of around 0.2% quarter on quarter, official data showed the economy actually expanded by 0.6%. If we apply the same difference of +0.4ppt to the Q3 PMI prediction of 0.0%, it points to a significant upside risk to our already above-consensus forecast of 0.1% in Q3.
10.42am BST10.42am BST
10:4210:42
With some solid PMI data in the bag, economists will be looking to tomorrow’s August retail sales data from the British Retail Consortium for a further injection of good news, this time from the High Street.With some solid PMI data in the bag, economists will be looking to tomorrow’s August retail sales data from the British Retail Consortium for a further injection of good news, this time from the High Street.
Forecasters at IHS Global Insight are expecting a strong result, helped by good weather, foreign tourists using the weak pound as an excuse for a shopping spree and a “feel good factor” thanks to Team GB’s gold-plated performance in the Rio 2016 Olympics.Forecasters at IHS Global Insight are expecting a strong result, helped by good weather, foreign tourists using the weak pound as an excuse for a shopping spree and a “feel good factor” thanks to Team GB’s gold-plated performance in the Rio 2016 Olympics.
It is also notable that the fundamentals are currently still pretty healthy for consumers with employment at a record high and purchasing power benefiting from earnings growth running well above consumer price inflation.It is also notable that the fundamentals are currently still pretty healthy for consumers with employment at a record high and purchasing power benefiting from earnings growth running well above consumer price inflation.
This has seemingly encouraged consumers to keep spending despite confidence falling sharply in the immediate aftermath of the Brexit vote – and confidence actually recovered some of its losses in August.This has seemingly encouraged consumers to keep spending despite confidence falling sharply in the immediate aftermath of the Brexit vote – and confidence actually recovered some of its losses in August.
However, IHS expects the buoyant mood on the High Street to be relatively short lived.However, IHS expects the buoyant mood on the High Street to be relatively short lived.
Consumers are likely to face less favourable purchasing power as inflation rises and earnings growth is limited by companies striving to limit their costs. In addition, unemployment seems seem likely to rise over the coming months.Consumers are likely to face less favourable purchasing power as inflation rises and earnings growth is limited by companies striving to limit their costs. In addition, unemployment seems seem likely to rise over the coming months.
Meanwhile, a likely softening labour market and reduced consumer confidence will dilute workers’ ability and willingness to push for higher pay awards even though inflation is expected to rise appreciably over the coming months.Meanwhile, a likely softening labour market and reduced consumer confidence will dilute workers’ ability and willingness to push for higher pay awards even though inflation is expected to rise appreciably over the coming months.
There is a very real likelihood that inflation will move above earnings growth during 2017.There is a very real likelihood that inflation will move above earnings growth during 2017.
10.22am BST10.22am BST
10:2210:22
FTSE 100 unmoved by PMI but sterling jumpsFTSE 100 unmoved by PMI but sterling jumps
The services sector PMI may have come in ahead of expectations at 52.9, resulting in a healthy figure of 53.2 for the economy as a whole, but the blue-chip stock index remains unimpressed.The services sector PMI may have come in ahead of expectations at 52.9, resulting in a healthy figure of 53.2 for the economy as a whole, but the blue-chip stock index remains unimpressed.
Having started the day flat, the FTSE 100 is has edged down by around 0.2% to 6,880.Having started the day flat, the FTSE 100 is has edged down by around 0.2% to 6,880.
However, the pound is on the up, reaching a seven-week high of $1.3375 against the dollar.However, the pound is on the up, reaching a seven-week high of $1.3375 against the dollar.
Analysts at Spreadex said the FTSE was suffering its “usual post-pound push malaise”, given that so many of the index’s companies earn in dollars.Analysts at Spreadex said the FTSE was suffering its “usual post-pound push malaise”, given that so many of the index’s companies earn in dollars.
The UK index shouldn’t feel too dejected, however; it’s still near 6900, while its oil and mining stocks are currently enjoying a strong start to the week thanks to Brent Crude’s 3% rise.The UK index shouldn’t feel too dejected, however; it’s still near 6900, while its oil and mining stocks are currently enjoying a strong start to the week thanks to Brent Crude’s 3% rise.
UpdatedUpdated
at 11.34am BST at 1.14pm BST
10.10am BST
10:10
Scratching the surface of the PMI data, it seems that the weakness of sterling is driving up inflation. Here’s more from Chris Williamson, chief business economist at IHS Markit, which publishes the PMI data.
While the weaker currency has helped boost exports, the drop in the exchange rate has also sparked inflationary pressures.
Input costs rose sharply on average, increasing at the fastest rate for five years. Manufacturing and construction saw particularly steep rises in costs linked to higher imported raw material prices. Both sectors reported the steepest cost increases since mid-2011. Services input costs rose at the fastest rate since November 2013.
Average prices charged for goods and services showed the largest monthly increase since January 2014 as firms passed higher costs onto customers. The rise in factory gate prices was the steepest for five years.
Over at the wealth management arm of Swiss bank UBS they think it’s too soon to breathe a sigh of relief about the Brexit vote aftermath.
Dean Turner, economist at UBS Wealth Management, said:
Today’s improvements are in line with the string of robust economic figures we’ve seen throughout August. But, while there is some reason for optimism today, it’s still too early to conclude that the UK has escaped the Brexit vote unscathed.
We still expect growth to slow to zero in the second half of the year, although the current quarter may be a little stronger than anticipated, followed by greater weakness in the fourth quarter.
Now that we’ve seen some resilience in the UK economy, many are questioning whether last month’s Monetary Policy Committee decision was the right one. We believe the Bank of England has taken the correct course of action and expect them to ease further before the year is out.
Updated
at 10.29am BST
9.59am BST
09:59
All-sector PMI also enjoyed a record rise to 53.2
With service sector survey data from IHS Markit now added to the results from construction and manufacturing, we have a result for the whole economy.
All-sector PMI hit 53.2, its highest level since March, more than recouping July’s slump to 47.4.
Christopher Williamson, chief business economist at IHS Markit, said:
While July’s decline had been largely attributed by companies to heightened political and economic uncertainty following the UK’s June 23rd vote to leave the EU, August’s increase reflected a marked improvement in sentiment. Businesses have reported that business and consumer confidence revived in August, with an immediate impact on demand.
A variety of factors, including the weaker pound, the establishment of the new government and the Bank of England’s aggressive stimulus are likely to have all helped to reduce uncertainty compared to July. Many companies were seeing business return to normal either simply as a result of customer confidence rising or a stoic determination to “Buck Brexit” and carry on regardless.
“The most important news is a rebound in services activity, with the rise in the business activity index being the largest on record.
Hiring also picked up again amid signs of business returning to normal for many companies after the uncertainty caused by the shock referendum result.
IHS Markit says the risk of a recession “has fallen significantly” and predicts the economy will grow by 0.1% in the third quarter.
They’ve provided a handy graph showing the historical relationship between PMI and economic output (GDP).
Updated
at 10.28am BST
9.44am BST
09:44
The better-than-expected services sector PMI result is receiving a warm welcome, albeit with a note of caution.
Chris Sood-Nicholls, managing director and head of global services at Lloyds Bank Commercial Banking, said:
It’s encouraging to see a recovery in the index this month.
There are bright spots from consumer retail figures and the recent manufacturing PMI. There is also a short-term feel-good factor in the markets as investors return to equities from low-yielding assets as a result of the Bank of England’s intervention on interest rates and quantitative easing.
However, it is too easy to over-interpret often volatile monthly data, particularly sentiment-based indices. Without a sustained period of hard numbers around business investment and trading, it is impossible to get an accurate picture of the economic impact of the vote to leave the EU.
Updated
at 9.45am BST
9.33am BST
09:33
Services sector PMI surges to 52.9 in August
The Purchasing Managers Index (PMI) for the UK’s dominant services sector has come in at 52.9, where anything above 50 means growth.
Just to recap, the consensus forecast among analysts was for a flat 50, meaning unchanged activity.
So the figure of 52.9 will be greeted with cheers in the City. That’s a record jump for services PMI from one month to the next, compared to a record fall the previous month.
Could this push the FTSE100 above 7,000 for the first time since last Spring?
9.29am BST
09:29
Eurozone PMI at 19-month low on German slowdown
The eurozone economy is still expanding but at its slowest pace for 19 months, according to the latest survey of business activity in the region’s major economies.
The slowdown is largely due to weaker growth in Germany, the eurozone’s largest economy.
#Eurozone #PMI at 19-month low of 52.9 as German economic growth slows https://t.co/Jdm5hupvZb pic.twitter.com/5ChUMZzYJc
9.16am BST
09:16
A small but significant regulatory announcement this morning, as the London Stock Exchange listing for Argos owner Home Retail Group is cancelled, following its £1.4bn takeover by Sainsbury’s.
8.50am BST
08:50
FTSE 100 is flat in early trading
The FTSE 100 has started the day in uncertain mood, hovering around last week’s close of 6,894.
A 2.2% surge on Friday saw it gain nearly 150 points to within spitting distance of 7,000 but it’s a more muted start to this week.
Some of the European markets are doing slightly better though.
The folks at Spreadex point out that the UK isn’t the only country with PMI data coming out today.
While the focus is undoubtedly on the FTSE’s services PMI this Monday the Eurozone does get involved with its own surveys this morning.
Already the Spanish figure has surpassed estimates, its services PMI coming in at 56.0 against the 55.1 forecast; Italy, on the other hand, is set to trickle lower, from 52.0 to 51.8 month-on-month, while the French and German readings are expected to match their initial readings at 52.0 and 53.3 respectively.
The prospect of this has pushed the CAC and DAD slightly higher, the former rising nearly half a percent to near a three-week high with the latter climbing a more mild 0.2%.
Don’t expect any news from the other side of the Atlantic ocean though. As veteran financial pundit David Buik of stockbroker Panmure Gordon points out, it’s Labor Day. That means no trading at all.
It's LABOR DAY in US and Canada, today, 5th September 2016 - So Wall Street and Toronto exchanges are CLOSED
Updated
at 9.14am BST
8.24am BST
08:24
While the consensus forecast is for the August services sector PMI to come in at 50, analysts at IHS Global Insight think it might have been better than that:
Specifically, we forecast the services business activity index to have moved back up to 50.7 in August after plunging to 47.4 in July from 52.3 in June and 53.5 in May. This would take it back above the 50.0 level that indicates unchanged activity.
Based on the experiences of the manufacturing and construction sectors, it is highly possible that services activity benefited in August from clients engaging in some of the activity and orders that were delayed in the immediate aftermath of the Brexit vote.
It isn’t all sunny uplands though. Looking further ahead, IHS thinks weakness could persist in certain key areas of the services sector.
This is most likely to be related to the commercial property sector and also the house market sector (housing market activity is currently muted). In addition, the Bank of England’s regional agents reported in their August survey of business conditions that there was weakness in corporate transactions, such as mergers and acquisitions activity.
And there may be worse to come.
There are also serious uncertainties about the outlook for the services sector going forward. While the economy has seemingly held up better than expected in the immediate aftermath of the Brexit vote, there is still the very real possibility that activity will increasing be pressurised by prolonged uncertainty (particularly once Article 50 is triggered and negotiations with the EU begin over future relationships).
Additionally, the fundamentals for consumers will most likely increasingly soften with purchasing power diluted by rising inflation and muted earning growth.
Unemployment also seems likely to rise.
The first jobs report after the EU referendum vote did not suggest any immediate Brexit-related effect.
7.51am BST
07:51
European markets are expected to open higher today and a better-than-expected services sector PMI performance could send the FTSE100 soaring.
Our European opening calls:$FTSE 6924 up 29$DAX 10737 up 53$CAC 4560 up 18$IBEX 8942 up 33$MIB 17253 up 69
Indeed, if the FTSE rises by as much as it did on Friday, a healthy 2.2%, the blue-chip index could break the 7,000 barrier, nearly 18 months after it did so for the first time.
7.45am BST
07:45
The agenda: Services sector PMI due at 9.30am.
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
We’ll get a slightly clearer picture of how the economy is doing post-referendum today with the release of the services sector Purchasing Managers Index (PMI) for August.
The PMI, produced by Markit/CIPS, is one of the most closely-watched surveys of economic activity, monitoring how much life there is in UK’s business sectors.
Today’s release covers the UK’s dominant services sector - anything from entertainment to banking, retail or insurance - accounting for nearly 80% of the economy.
The survey for August will be released at 9.30am, with last week’s consensus forecast from analysts predicting the index will rise to 50, indicating unchanged activity. Anything above 50 means growth.
Even a flat result of 50 would represent a bounceback from July, when the survey showed the biggest decline in activity since the financial crisis, falling to 47.4 from 52.3 in June.
But this could have been down to post-referendum jitters and there have been signs of a rebound since then.
The manufacturing sector PMI last week came in at 53.3, as factories shook off the Brexit shock.
And the construction PMI released on Friday was 49.2, still a contraction but far better than expected. The resurgence in construction and manufacturing has boosted hopes that the service sector will follow suit.
Updated
at 7.58am BST