Britain on course for recession as services growth stagnates

Bloomberg

The UK may be on course for its first recession since the financial crisis after Brexit uncertainty pushed down the nation’s dominant services industries more than expected.
Growth in the sector almost stalled last month, IHS Markit said as it published its Purchasing Managers Index on Wednesday. With similar surveys indicating the nation’s manufacturing and construction industries are in deep downturns, the readings imply the economy is set to shrink 0.1 percent in the third quarter, Markit said.
Output already fell 0.2 percent in the three months through June, which means that such an outcome would mean the country had entered a recession even before it leaves the European Union at the end of next month.
“Business activity in the service sector almost stalled in August as Brexit-related worries escalated, curbing spending by both businesses and consumers.” said Chris Williamson, chief business economist at Markit.
“The lack of any meaningful growth in the servicesector raises the likelihood that the UK economy is slipping into recession.”
Worse could be to come amid fears that Boris Johnson’s government could pursue a potentially damaging no-deal exit.
Markit’s index for the services sector fell to 50.6 last month, below economists’ expectations for a reading of 51. Business optimism slipped to its lowest level since the immediate aftermath of the 2016 referendum, while input price inflation accelerated to its strongest since January.