United Kingdom’s economy expected to slow in 2016

The UK December Services headline PMI slid down 0.4pts to 55.5, in line with expectations. According to the recent PMI survey data from Markit and CIPS, the UK's service sector growth stabilized at the strong rate last month. With a steep rise in new business, total activity grew at a robust rate and so did employment.

Outstanding business grew at a modest pace and firm's longer-term expectations for business activity were the weakest since early-2013.

The Composite PMI declined by 0.4pts to 55.3. With easing investment and consumer goods, manufacturing fell in December by 0.6pts to 51.9. Meanwhile, the construction index rose 2.5pts in December to 57.8, almost making up for November's large decline.

"While today's decline in business sentiment, with composite new orders dipping on the month and the quarter, came without any meaningful surprise, the key take-away is the significant decline in services firms' forward expectations", said Barclays. "Today's release only confirms ourcautious macro view on economic activity, with economic growth slowing into 2016 (to 1.9% y/y from 2.4% y/y in 2015)".