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Growth slows in UK services sector

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Growth in the UK services sector slowed to its lowest pace in nearly a year last month, according to a survey.The IHS Markit/CIPS purchasing managers’ index (PMI) for August dropped to 53.2 from 53.8 in July. A figure above 50 indicates expansion.Rising costs for fuel, staff and imported goods led to companies raising their prices, the survey found.New order volumes in the service industry increased at the second slowest rate since September 2016.Several providers commented that “fragile business confidence had led to delayed spending decisions among clients”.’Warning signals’Chris Williamson, chief business economist at IHS Markit, said: “Although the latest two months’ data put the economy on course for another 0.3% expansion in the third quarter, momentum is being gradually lost.”Robust manufacturing growth means the economy may be rebalancing towards goods production, aided by the weaker pound, but the slowdowns in services and construction send warning signals about the health of the economy.”In services, the weaker growth trend was most evident in consumer-facing sectors such as hotels and restaurants and other personal services, which includes businesses such as cinemas, gyms and hairdressers.”The overall level of optimism also remained subdued, mainly linked to Brexit uncertainty, close to levels that have previously been indicative of the economy stalling or even contracting.”
Source: BBC