LONDON (Reuters) - Britain's giant services industry, spanning global banks to high-street hairdressers, staged only a timid recovery in April after contracting in the run-up to the original Brexit deadline in March, a survey showed on Friday.
Suggesting the broader economy is stagnating, the IHS Markit/CIPS UK Services Purchasing Managers' Index (PMI) rose to 50.4 in April from 48.9 the previous month, inching back above the 50 dividing line between growth and decline.
The reading was in line with forecasts in a Reuters poll of economists.
However, new orders faded again, and March and April together marked the weakest two months for British services firms in more than six years.
Overall the PMI showed a familiar picture of many businesses subdued by ongoing uncertainty about the terms of Britain's exit from the European Union.
Consumers and their spending have been the main driver for the world's fifth-biggest economy.
On Thursday, the Bank of England lifted its growth forecasts for Britain's economy over the next three years although the outlook remains slow. BoE Governor Mark Carney said surveys such as the PMIs might overstate the effect of Brexit uncertainty.
Britain was due to have left the EU on March 29. Prime Minister Theresa May, who has been unable to get her divorce deal approved by parliament, secured a new deadline of Oct. 31.
It remains unclear when, how and even if Brexit will happen, more than three years after voters decided to leave the EU.
Earlier this week other PMI surveys showed the boost to British factories from pre-Brexit stockpiling faded in April, while the construction industry barely grew.
All in all, the latest PMIs suggested the economy "more or less stalled at the start of the second quarter", survey compiler IHS Markit said.
"Forward-looking indicators such as order books and backlogs of work hint at a near-term sustained weakness of demand, which has already filtered through to a reduction of employment," Chris Williamson, chief economist at IHS Markit, said.
The PMI showed new orders contracted for a fourth month in a row, the longest such run since the global financial crisis.
The all-sector PMI, which combines services, manufacturing and construction, rose to 50.9 from 50.0 in March.
(Writing by Andy Bruce; Editing by Hugh Lawson)
