UK business activity slumps by most since early 2021 – PMI

LONDON, Oct 5 (Reuters) – British business activity last month contracted by the most since early last year, a survey on Wednesday showed, although the economic downturn was less severe than initially estimated. .

The final version of the S&P Global U.K. Composite Purchasing Managers’ Index fell to 49.1 in September from 49.6 in August, the lowest reading since January 2021 when much of the country remained under the COVID-19 lockdown.

Any reading below 50 would indicate a contraction in activity.

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While the reading was an improvement from a preliminary “fast” reading of 48.4, service companies, which make up the bulk of the private sector economy, were the least optimistic about the outlook since the early days of the pandemic in May 2020.

Overall, the survey is in line with other indicators that the UK economy is slipping into recession.

“Services companies cut their growth forecasts in September to the lowest level in nearly two-and-a-half years, which survey respondents attributed to concerns about falling disposable income and an unfavorable global economic outlook,” said Tim Moore, S&P Global market intelligence.

The services PMI fell to 50.0 from 50.9 in August, indicating stagnation but still better than the initial reading of 49.2.

New orders, both domestic and foreign, fell in September, with respondents blaming Brexit and a weakening world economy, as well as low confidence and cost-cutting by customers.

Inflationary pressures remained near record highs in May, as businesses reported “inevitable” price increases due to higher wages, energy and supply bills.

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Reporting by Andy Bruce; Editing by Susan Fenton

Our Standard: The Thomson Reuters Trust Principles.

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