By Max Clarke
Growth in the UK’s vital services sector slowed unexpectedly in August, the latest services purchasing managers index from Markit/CIPS has confirmed.
The fall from 54.4 to 51.1 represents the single biggest fall in a decade, as eurozone uncertainty continues to take its toll on the FTSE, and constrained incomes and rising inflation continue to erode the UK’s consumer confidence.
“We had expected a fall but this is real shocker,” commented Nick Jones, chief economist at World First currency brokers.
“While the services industry is still growing, albeit slightly, further shocks to consumer confidence or the supply chain would see this figure dip into contraction and pose a real threat to Q3 GDP.”
“It is clear that the ‘soft patch’ of weak economic data has now turned into a quicksand-like bog and that the UK is being dragged down alongside other developed economies.”