June’s composite PMI suggests the economic recovery lost a bit of momentum towards the end of the second quarter. And after two stronger-than-expected inflation prints for April and May, the renewed pick-up in the services output prices balance will be a bit disappointing for the Bank of England. This may not prevent an interest rate cut from 5.25% to 5.00% at the August policy meeting, but the risk is that rate cuts thereafter may be a bit more gradual than we currently expect.
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