BREAKING NEWS

UK services sector hobbled by politics - PMI

UK services sector hobbled by politics - PMI
FILE PHOTO: People walk through the Canary Wharf financial district of London, Britain, December 7, 2018. REUTERS/Simon Dawson -
Copyright
Simon Dawson(Reuters)
Text size Aa Aa

LONDON (Reuters) – Britain’s services sector shrank in November to mark three months without growth for the main driver of the economy, a survey showed on Wednesday as uncertainty over Brexit and an imminent national election weighed.

The IHS Markit/CIPS UK Services Purchasing Managers’ Index (PMI) fell in November to 49.3 from October’s 50.0.

The reading was revised higher from a preliminary 48.6, but the index has still not exceeded the 50 threshold for growth since August – the longest such run since 2009.

“Service providers have attributed the recent soft patch to delayed decision-making on new projects until greater clarity emerges in relation to the domestic political landscape,” IHS Markit economist Tim Moore said.

The survey added to a string of underwhelming business activity data in the run-up to the Dec. 12 vote. However, the state of the economy has only played a minor role in an election campaign dominated by Britain future relationship with the European Union and promises of increased spending on public services.

The figures suggested the world’s fifth-biggest economy is contracting at a quarterly rate of 0.1%, financial data company IHS Markit said, a smaller decline than the 0.2% suggested by November’s flash estimate.

The PMIs have overstated economic weakness recently, in part because of higher government spending ahead of Brexit that has not been captured in private-sector measures of demand.

“November’s PMI surveys collectively suggest that the UK economy is staggering through the final quarter of 2019, with service sector output falling back into decline after a brief period of stabilisation,” Moore said.

New orders contracted at the fastest pace since July 2016, the month after Britons narrowly voted in favour of Brexit in a referendum, the PMI showed.

The composite PMI, which combines the services and manufacturing output indexes, fell to 49.3 from 50.0, matching September’s 38-month low, but down less than its flash estimate of 48.5.

(Reporting by Andy Bruce; editing by John Stonestreet)

euronews provides breaking news articles from reuters as a service to its readers, but does not edit the articles it publishes. Articles appear on euronews.com for a limited time.
Euronews is no longer accessible on Internet Explorer. This browser is not updated by Microsoft and does not support the last technical evolutions. We encourage you to use another browser, such as Edge, Safari, Google Chrome or Mozilla Firefox.