Morgan says the worn and sluggish pitch used for his side's eight-wicket defeat at Sophia Gardens, the same surface used for Pakistan's match against Sri Lanka last Monday, cancelled out any home advantage his side had as tournament hosts.
"One thing we didn't do was adapt to conditions, which I thought Pakistan did extremely well", England captain Eoin Morgan said. "Certainly, I think we're moving in the right direction".
England's batsmen - who have dazzled in the two years following the 2015 World Cup, scoring over 300 a world-leading 23 times - were bowled out for just 211 in the face of some quality seam bowling in Cardiff.
Morgan, however, did give credit to Pakistan for their victory, especially their bowlers.
Morgan insisted they can still take positives from the tournament with the World Cup here in 2019 and with England yet to win a global 50-over tournament. The hosts started solidly to reach 118-2 in their first 25 overs and then lost eight wickets for 93 runs in the next 25.
The job was completed by Babar and Mohammad Hafeez after Pakistan's other opener was bowled by Jake Ball for 76.
"I think the pitch was very good - it was good for both teams".
"We certainly weren't overconfident".
England have been the team to beat in the tournament. "I think this (his emergence) is something marvelous for Pakistan cricket".
"Every partnership we had started behind the rate, which put us under the pump a little bit, and none of our batsmen seemed to get away".
Pakistan made another change bringing in leg-spinning all-rounder Shadab Khan in place of Fahim Ashraf, a pace-bowling all-rounder. "That's why we won".
"We just motivated the guys - "don't worry about the India match, it's gone ... if we play good cricket, definitely we will win this tournament".
"I think it [today] was the best game because it was a semi-final, no one recognised us".