Wealth Manager - the site for professional investment managers

Register to get unlimited access to all of 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 Navigating geopolitical risk with ETFs

Navigating geopolitical risk with ETFs

ETFGI’s Deborah Fuhr on how investors can use exchange-traded funds to position their portfolio.

Play Sarasin’s Boucher: why I like salmon with chocolate

Sarasin’s Boucher: why I like salmon with chocolate

Henry Boucher, manager of the £129 million Sarasin Food & Agriculture Opportunities fund, explains why he is gobbling up salmon and chocolate stocks.

Play Alibaba hype, the UK slowdown and opportunities in European sovereign bonds

Alibaba hype, the UK slowdown and opportunities in European sovereign bonds

Libby Ashby and leading wealth managers analyse what the Alibaba IPO hype means for Chinese equities, slowing growth of the UK economy and whether there’s anything left to play for in the European sovereign bond market.

Your Business: Cover Star Club

Profile: How David Esfandi is shaping Canaccord Genuity WM

Profile: How David Esfandi is shaping Canaccord Genuity WM

After six months as chief executive of Canaccord Genuity David Esfandi's ambitions are taking shape

Wealth Manager on Twitter