July data highlighted a disappointing start to the third quarter for the UK service sector, with business activity and incoming new work rising at softer rates than in June. There were also signs that difficulties filling staff vacancies persisted in the service economy, which contributed to the weakest rise in payroll numbers since August 2016.

At 53.5 in July, down from 55.1 in June, the seasonally adjusted IHS Markit/CIPS UK Services PMI Business Activity Index signalled the slowest expansion of service sector output since April. Nonetheless, the latest reading was comfortably above the 50.0 no-change mark and pointed to a solid upturn in business activity.