(Alliance News) - The UK service sector continued to grow in June but hit a seven-month low, survey results from S&P Global showed on Wednesday.

The seasonally adjusted services PMI business activity index remained in expansionary territory during June, posting 52.1. While this did signal an eighth consecutive monthly increase in output, it was down from 52.9 in May.

It also marked the softest rate of growth since November last year.

S&P explained that June's upturn was dampened as output levels at some companies were restricted by client hesitancy and delays in the sign-off of new projects due to the upcoming general election.

"We are seeing some evidence of a pre-general election seize-up across the UK services economy, with growth in business activity slowing to a seven-month low in June as the prospect of a change in government led to the adoption of a 'wait-and-see' approach by some, restraining sales," Joe Hayes, principal economist at S&P, said.

"Nevertheless, we're on track for another quarter of GDP growth, according to Composite PMI data for the three months to June, albeit one that will be less punchy than the first quarter's 0.7%."

The composite output index remained in expansion territory at the end of the second quarter, although the pace of growth in business activity slowed for a second successive month to its weakest in 2024 so far, S&P said.

It posted 52.3, down from 53.0 in May, meaning the index reached a six-month low.

On Monday, the seasonally adjusted S&P Global UK manufacturing PMI registered 50.9 in June, down slightly from May's 22-month high of 51.2 and below the earlier flash estimate of 51.4.

The services PMI is compiled by S&P Global from responses to questionnaires sent to a panel of around 650 service sector companies in the UK. The responses were collected between June 12 and 26.

By Sophie Rose, Alliance News senior reporter

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