UK composite flash PMI falls to 50.7 from 52.8
Manufacturing PMI weakest since May 2020 as orders slow
Inflation pressures lowest since February 2021
Sterling and gilt yields fall as markets trim BoE bets

LONDON, July 24 Reuters Britain39;s private sector is growing at its weakest pace in six months in July, as orders for businesses stagnate in the face of rising interest rates and stillhigh inflation, a survey showed on Monday.

The SP GlobalCIPS composite Purchasing Managers39; Index PMI showed a preliminary reading of 50.7, down from 52.8 in June in the biggest monthonmonth drop in 11 months.

Although above the 50level that separates growth from contraction, it was the weakest reading since January. The drop was also greater than forecast by any economist in a Reuters poll, which had pointed to a decline to 52.4.

The survey reinforced a sluggish outlook for Britain39;s economy, which has so far defied forecasts of recession in 2023 but has yet to feel the full impact of 13 backtoback interest rate increases by the Bank of England.

Rising interest rates and the higher cost of living appear to be taking an increased toll on households, dampening a postpandemic rebound in spending on leisure activities said Chris Williamson, chief business economist at SP Global, which produces the data.

Meanwhile, manufacturers are cutting production in response to a worryingly severe downturn in orders, both from domestic and export markets, Williamson said.

Euro zone PMI…