The UK is likely to fall into recession after the crucial services sector showed minimal growth in August.
With the UK economy having already shrunk during the last quarter and the manufacturing and construction industries showing contraction in August, a closely watched survey suggests very little room for optimism for the current quarter.
The Purchasing Managers’ Index (PMI), created by IHS Markit/CIPS, reported a score of 50.6 in August. Any figure below 50 indicates shrinking, and it shows a drop on July’s score of 51.4.
IHS economist Chris Williamson said: “The lack of any meaningful growth [in services]… raises the likelihood that the UK economy is slipping into recession.”
He added that uncertainty surrounding Brexit and higher business costs, caused by the falling value of the pound, were only likely to continue into autumn.
Mr Williamson said: “While the current downturn remains only mild overall, the summer’s malaise could intensify as we move into autumn.”