The UK Purchasing Managers Index (PMI), prepared by CIPS and Markit Economics, fell to 53.2 from 53.8. Analysts expected a reading of 53.5. Low difference causes subdued market reaction.

On the third day of each month, we can look how managers look at future service contracts in the UK. This indicator has fallen and is the lowest level in 11 months, but still above the barrier of 50 points, which conventionally means economic growth.

August saw robust growth in business activity and new jobs, but growth slowed compared to July and remained weaker than the average for the first half of 2017. The latest study also indicated stronger cost pressures in the services sector, with inflation rising fastest since February.

Higher personnel costs, fuel bills and prices of imported items contributed to the increase in average prices charged by service providers in August.

“In services, the weaker trend was most evident in consumer sectors such as hotels, restaurants and other personal services, including companies such as cinemas, gyms, hairdressers. The overall level of optimism remained moderate, mostly related to Brexit,” said Chris Williamson, Chief Business Economist.

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