Home Business News UK is heading towards a double dip recession

UK is heading towards a double dip recession

by LLB Finance Reporter
23rd Nov 20 3:01 pm

The closely followed IHS Markit/CIPS Flash UK Composite PMI data has shown that the UK’s private sector reversed in November as the lockdown ended four months of expansion in England.

So far this month data has shown a reading of 47.4, and anything below 50 is seen as a decline in activity. During October the reading was 52.9 and in September it was 56.5.

As a result of the hospitality sector having pubs and restaurants being made to close, the downturn had its fastest fall since May.

Chris Williamson, chief business economist at IHS Markit said, “A double-dip is indicated by the November survey data, with lockdown measures once again causing business activity to collapse across large swathes of the economy.

“As expected, hospitality businesses have been the hardest hit, with hotels, bars, restaurants and other consumer facing service providers reporting the steepest downturns.

“Some comfort comes from the data suggesting that the impact of the lockdown has not been as severe as in the spring, and manufacturing has also received a significant boost from inventory building and a surge in exports ahead of the UK’s departure from the EU at the end of the year, providing a fillip for many companies.

“However, while the lockdown will be temporary, so too will this pre-Brexit boost.”

Duncan Brock, group director at CIPS added, “News of potential vaccines bringing a return to normality lifted the mood with a big rise in optimism to its highest since March 2015.

“But in the meantime, with service businesses still shedding jobs at a head-spinning rate, the new year will be difficult as another recession waits on the doorstep.”

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