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Highlights:
- Growth in the UK services sector slowed to a 17-month low in July due to declining consumer spending and high inflation.
- The growth activity in the UK's services sector touched 52.6 last month.
Skyrocketing inflation levels have forced millions of UK citizens to reduce spending on discretionary items. This reduction in consumer spending, combined with businesses' efforts to curb expenses, has led to a decrease in demand. As a result, the UK's service sector is struggling to grow.
The sector witnessed the slowest growth in 17 months in July, according to the latest data from the monthly S&P Global/CIPS UK services PMI survey. The growth activity in the UK's services sector touched 52.6 last month, the lowest since 2021 when the country was going through a lockdown due to the COVID-19 pandemic.
The expenses for the firms have been growing, but the rate of growth was the slowest since December 2021. Fuel and utility bills continued to increase the costs for companies. On the other hand, the prices charged by the firms saw the slowest growth in five months.
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The report also added that firms continued to struggle to add new business during the month as inflation and the cost-of-living crisis raised the economic uncertainty for the sector.
In the wake of the latest data, let us explore some FTSE-listed stocks and look at their investment prospects.
Rentokil Initial Plc (LON: RTO)
The British business services group is listed on the blue-chip FTSE 100 index. It provides pest control services to its customers in the UK, Americas, Europe, Asia, and the Pacific. Besides, it also offers property care services. The company currently holds a market cap of £10,057.24 million, and the EPS stands at 0.14. The stock value has declined by 4.51% over the past 12 months and by 7.18% on a year-to-date basis. As of 12:39 pm GMT+1 on 3 August, the stock traded at GBX 542.20, up 0.48%.
Serco Group Plc (LON: SRP)
The Hampshire-headquartered company takes contracts for provisioning public services in the United Kingdom and European countries. It works in multiple sectors like transport, health, justice, defence, citizen services, etc. The share value of the company has appreciated 30.4% over the past one year, while the year-to-date return is 37.59%. The stock was trading at GBX 185.20, down 0.80%, as of 12:43 pm GMT+1 on Wednesday.
Homeserve Plc (LON:HSV)
The British multinational home repairs and improvement firm is a constituent of the mid-cap focused FTSE 250. It has an EPS of 0.40 and has provided a return of 24.46% to shareholders over the past 12 months. With a market cap of £3,969.36 million, the company's shares were trading at GBX 1,178.00, marginally down by 0.09%, as of 12:51 pm GMT+1 on Wednesday.
Note: The above content constitutes a very preliminary observation or view based on market trends and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.
