UK: Slow services PMI decline has accelerated - BBH

Research Team at BBH, suggests that the main takeaway is the Eurozone economy does not appear to have been impacted (yet) by the UK decision to leave the EU and while the UK is a different story. 

Key Quotes

“Today's services PMI confirmed the preliminary 47.4 estimate.  It is down from 52.3 in June and 53.5 in May.  What was a slow decline (59.5 in June 2015) has accelerated.  The composite reading of 47.5 is a little below the flash reading and contrasts with the 52.5 June report, which was the average for Q2.

It is little wonder that NIESR warned that the UK economy is likely contracting here in Q3 and estimated a 50% chance that Q4 contracts as well. The market anticipates a rate cut tomorrow but is more divided on the outlook for new asset purchases and other credit easing measures.  Recall that tomorrow the BOE will announce the outcome of the meeting, release the minutes, provide updated economic forecasts, and hold a press conference.  The market may be disappointed if the BOE only cuts rate, but we suspect that there is a risk of "sell the rumor buy the fact" type of activity.”