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 JPM’s Negyal: Back divis to temper EM volatility

JPM’s Negyal: Back divis to temper EM volatility

Omar Negyal, co-manager of the JPMorgan Global Emerging Markets Income trust, says a dividend approach to emerging markets reduces the volatility of investing in the asset class.

Play WMR: Why Russia will lose this war

WMR: Why Russia will lose this war

Author and journalist Adam Lebor believes a perfect storm is brewing when it comes to the Russian economy. .

Play WMR: Gerard Lyons warns Asia is the real risk, not Russia & Ukraine

WMR: Gerard Lyons warns Asia is the real risk, not Russia & Ukraine

Chief economic adviser to London mayor Boris Johnson outlines the geo-political risks in Asia and explains why the risk of another eurozone crisis must not be underestimated.

Your Business: Cover Star Club

Profile: 'new normal' now is as dangerous as when it was applied to tech

Profile: 'new normal' now is as dangerous as when it was applied to tech

7IM's CIO Chris Darbyshire says he has been re-energised by his new role, but has little time for 'new normal' doom-mongers

Wealth Manager on Twitter