The gradual moderation of UK economy witnessed in 2015 is back under process. The Composite PMI headline fell 3.4 points to 52.8 in February. This decline was due to services and manufacturing, both of which unexpectedly fell. The Composite PMI headline on a January/February average relative to Q4 2015 fell 1 point to 54.5. This was mainly due to services that fell to 54.1 as manufacturing increase to 56.1.

Services business expectations continue to be on a downward trend and near to the three-year low posted in January with anecdotal proof from  the Markit services press release indicating to domestic and global concerns as being the factors preventing clients from placing orders. Companies are said to be worried about the growth transition in China, increasing uncertainty regarding the EU referendum output and financial market volatility.

UK's firm sentiment is expected to fall further because of the EU referendum. Hence, it seems likely that the firm confidence will worsen in the coming months. This confirms the cautious macro view on economy activity, with the GDP growth expected to slow to 1.8% in 2016 from 2.2% in 2015.