UK: Index of services data awaited – RBC CM

Research Team at RBC Capital Markets, suggests that alongside the UK’s third estimate of Q2 GDP will come the first look at how activity in the service sector is shaping up at the start of Q3.

Key Quotes

“This could be quite important as service sector output is almost 80% of total output so this will be a key input to Q3 GDP growth estimates. Consequently the performance of the economy in Q3 could very well be pivotal when it comes to the MPC decision on Bank Rate at the November meeting. Mapping across the extremely weak services PMI index for July to actual output is unlikely to be particularly accurate given the post-referendum volatility in the business surveys, but nevertheless, it feels as though expectations for expansion should be modest on this occasion.”