Business activity has fallen for the third consecutive month in the UK’s private sector and economists are warning that a recession “cannot be ruled out.”
Services and manufacturing saw declines in output this month, according to economic data.
In October the S&P Global/CIPS flash UK purchasing managers’ index (PMI) reported a reading of 48.6, higher than 48.5 seen in September, meaning the sector is declining as it has a score below 50.
Chris Williamson, chief business economist at S&P Global Market Intelligence, said: “The UK economy continued to skirt with recession in October, as the increased cost of living, higher interest rates and falling exports were widely blamed on a third month of falling output.
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“The overall pace of decline remains only modest, signalling a mere 0.1% quarterly rate of GDP decline, but gloom about the outlook has intensified in the uncertain economic climate, boding ill for output in the coming months.
“A recession, albeit only mild at present, cannot be ruled out.”
Manufacturing is in it’s eighth consecutive decline and the PMI stands at 45.3, which is better then the previous month.
The jobs market is showing signs of cooling as companies reported a decrease of employment in October for the second month.
John Glen, chief economist at the Chartered Institute of Procurement and Supply, said: “Redundancies were also increasing in number as staff cuts became one option in a range of cost-cutting measures.
“An improvement in input cost inflation was not enough to stem the haemorrhaging of business margins, as higher salary demands were still present and rising fuel bills offset falling prices for raw materials.”