UK Oct service sector PMI at 2-year low
Employment dipped as new business shrank over the month
By CFOWorld.co.uk staff | CFO UK | Published 10:34, 05 November 12
Service sector activity in the UK has fallen to a two-year low according to the latest service sector purchasing managers’ index (PMI).
The October PMI services index from Markit/CIPS, published on Monday, fell to 50.6 from 52.2 in September. While any score above 50 indicates growth, the level is the lowest on record for almost two years.
Markit noted that growth in new business eased as employment in the sector dipped for the second successive month.
"The latest UK services PMI data provide a warning to those who saw the strong growth in the GDP in the third quarter as symbolising the start of a strong and speedy economic recovery," according to Markit economist Andrew Harker.
"The expectation among firms is for activity to improve over the coming year, but the road to full economic recovery still looks to be a long one," he added.
Howard Archer, chief UK economist at IHS Global Insight, said the latest survey was disappointing, and fuels concern that the economy is struggling to develop even modest underlying growth despite the better-than-expected rebound in GDP in the third quarter.
“The survey certainly keeps open the possibility that the Bank of England could go for more Quantitative Easing at the conclusion of the November MPC meeting on Thursday,” he added.
Last week, the construction PMI index for October recorded a marginal rise.
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