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Beecroft: PMI slowdown and sterling to suffer as BoE meets

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Chairman of Saxo Capital Markets Nick Beecroft analyses the latest PMI readings from the UK and assesses the likely thinking from the Bank of England's Monetary Policy Committee as it meets today.

The UK services sector PMI saw its sharpest slowdown in almost four years. The May reading was 56.5, down from 59.5 in April. Still a healthy number above the 50 mark but disappointing because the services sector accounts for around 65% of the UK economy.       

Sterling will suffer, according to Nick, who sees headwinds from Greece and China pushing against the UK economy. An extension of the austerity programme by a newly elected majority Conservative government is also likely to keep the Bank of England reluctant to raise rates in a hurry.