UK Services Dives to 10-Month Low on Omicron Concerns

Source: IHS Markit

The United Kingdom’s services sector fell to a 10-month low in December, weighed down by the impact of the Omicron variant. EWU is up 0.21% premarket.

• The IHS Markit/CIPS UK Services PMI plunged to 53.6 in December from 58.5 in November. This is the lowest rate recorded since February.
• The drop came amid the weaker performance of travel, leisure, and hospitality businesses due to the pandemic restrictions imposed during the month.
• New orders declined during the month, with the expansion falling to the lowest level since the recovery started in March.
• Sales were also hit by the subdued demand for consumer services and a spending hesitancy due to the negative impact of the pandemic uncertainties.
• Average cost burdens posted a sharp increase due to higher prices for energy, fuel, transport, and raw materials. Staff salaries also grew during the month.
• Business confidence was more upbeat due to the increase in job creation, in line with the levels seen in the same month the previous year.