Pound slips as weak services dash hopes of bounceback

Hopes that the UK economy will recover swiftly from first-quarter GDP growth of 0.3% have been undermined by the weakest survey reading for the services sector this year. Markit's purchasing managers' index for services dropped to 56.5 in May from 59.5 in April, the sharpest one-month decline since 2011 and the weakest performance since December. Markit said that last month's overall reading, which included services, construction and manufacturing, indicated GDP growth of 0.4% in May and 0.5% for the past three months. Sterling slipped as low as $1.5252 against the dollar and fell heavily against the euro on the data. Evidence that the UK's dominant services industry has slowed may deter the Bank of England from raising rates, Markit suggested.


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