In October the UK’s services sector had weaker demand for the third month in a row and PMI data suggests the UK economy is “flirting with a mild recession.”
The S&P Global/CIPS UK services PMI survey revealed in October a reading of 49.5 marginally up from 49.3 in September and any score below 50 means the industry is contracting.
Tim Moore, economics director at S&P Global Market Intelligence, said: “A shallow downturn in UK service sector activity persisted in October as businesses struggled to make headway against a backdrop of worsening domestic economic conditions and stretched household budgets.
“Forward-looking survey indicators suggested that service providers will continue to skirt with recession.
“The degree of optimism towards the business outlook was the lowest in 2023 so far, despite relief that interest hikes have taken a pause this autumn.”
Samuel Tombs, chief UK economist for Pantheon Macroeconomics warned that the latest PMI data suggests the UK economy is “flirting with a mild recession,” which could to be narrowly avoided.
“Decreasing confidence about the outlook for demand prompted businesses in the services and manufacturing sectors to collectively reduce employment for a second consecutive month, albeit at a mild pace,” he said.