Wealth Manager - the site for professional investment managers

Register to get unlimited access to Citywire’s fund manager database. Registration is free and only takes a minute.

UK on course for growth squeeze as services demand slides

UK on course for growth squeeze as services demand slides

The UK has suffered its first reduction in service sector output since December 2010, as expectations for the year ahead remain downbeat.

According to the latest Markit PMII data the level of incoming new work has slipped back for the first time in two years, and a contraction in UK growth is on the cards.

The headline index from the survey – the seasonally adjusted Business Activity Index – also fell and came in at 48.9 in December, down from its reading of 50.2 for November.

'General uncertainty over the direction of the economy and the lack of client expenditure weighed on the sentiment of service providers during the latest survey,' Markit said, while Capital Economics believes the gloomy reading implies a fall in fourth quarter GDP.

The consultancy's chief UK economist Vicky Redwood said the Business Activity Index had moved down for four consecutive months, adding that rather than focusing on Olympic demand unwinding, the lower readings are more likely suggesting underlying weakness.

Redwood said: A weighted average of the business surveys remains consistent with a renewed contraction in GDP in Q4...we still expect a 0.4% fall.'

Howard Archer, of IHS Global Insight, said the survey was 'very disappointing'.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Play Big City Bright Future

Big City Bright Future

Big City Bright Future, the brainchild of BlackRock, is a three-week work experience programme for school leavers looking to forge a career in the City.

Play Kames' Ennett: Trump good for US high yield, but beware Europe

Kames' Ennett: Trump good for US high yield, but beware Europe

Kames Capital’s head of high yield David Ennett believes the changing political landscape will be a positive for the US, but negative for Europe in 2017.

Play Philip Milburn: why inflation won't run out of control

Philip Milburn: why inflation won't run out of control

Kames bond fund manager views inflation as more of 'scare' than a 'problem' and is positioning his portfolios accordingly.

Read More
Your Business: Cover Star Club

Profile: change is the only constant for Quilter Cheviot

Profile: change is the only constant for Quilter Cheviot

This is not the first time we have profiled David Miller, but at the time of his previous appearance his company looked very different.

Wealth Manager on Twitter