Positive sentiment in the UK services sector dropped to its weakest in three years in January, according to a survey of buyers.
The Markit/CIPS UK Services Purchasing Managers’ Index ticked upwards to record 55.6 in January, compared to 55.5 in December and against the no-change reading of 50.
Firms reported the sharpest rise in new business since last July and employment levels increased at the fastest pace since October.
However, output growth was weaker than rates achieved in 2013, 2014 and 2015 and the 12-month outlook for the sector, while positive, showed sentiment was the weakest in three years.
Chris Williamson, chief economist at Markit, said: “Worries about a Chinese hard landing, financial market jitters, higher interest rates in the US, more austerity at home and the possibility of Brexit and EU tensions have collectively pushed the business mood in the dominant service sector to its darkest for three years.”
David Noble, group CEO, CIPS, said: “The good news is that the most dominant UK sector continued to expand output at a steady if uninspiring pace. January’s rise in activity was the strongest for six months and this current period of growth, lasting almost three years, is the second longest since the survey began.”