“Equities around the world remain in robust mood,” he added.
The IHS Markit/CIPS UK services purchasing managers’ index fell to 50.1 — its lowest level in two and a half years — down from 51.2 a month earlier. A reading above 50 indicates growth.
Concerns about Britain’s impending departure from the European Union dampened demand and caused firms to delay making decisions on new projects.
Later Tuesday, investors will focus on British Prime Minister Theresa May’s key Brexit speech in Northern Ireland.
EU president Jean-Claude Juncker will host May for talks in Brussels on Thursday as the two sides seek to save their Brexit deal.
Sterling had won a partial reprieve on Monday after German Chancellor Angela Merkel struck a conciliatory tone over further Brexit talks.