U.K. strong PMI momentum to continue

The service sector PMI of U.K. excludes the retail sector which unfortunately is one of the few areas of the service sector for which information is available timely. This makes it difficult to track services output well on a monthly basis so we need to rely instead on own assessment of the underlying drivers. 

"Real income growth is strong, which is highly supportive of service sector demand so the trend in services output is assumed to be firm. The services PMI is volatile on a month to month basis dipping from 58.5 in June to 57.4 in July. A bounce to 58.3 in August is foreseen. The overall composite PMI is likely to rise slightly from the July reading of 56.6", states Societe Genrale in a research note on Thursday.