Growth in UK services slumped to the weakest in almost two-and-a-half years against a background of subdued business and consumer spending.
The IHS Markit/CIPS UK Services Purchasing Managers’ Index dipped to 50.4 in November, down on 52.2 in October and against the no-change reading of 50.
Service providers signalled a slowdown in new business growth for the third month running and there was a sharp drop in work-in-hand.
Duncan Brock, group director at CIPS, said: “Disregarding the month immediately after the UK’s vote to leave the EU in 2016, the services sector put in its worst performance for almost six years as confidence, a lack of strength in the global economy and Brexit uncertainty took its toll.”
On a more positive note, input cost inflation eased to a six-month low and the rise in prices charged was the among the weakest since mid 2017.
Brock said: “If there’s any good news to be had, input price inflation was less intense but fuel and higher salary costs continued to challenge and there was a significant downturn in outstanding work not exceeded since 2009 during the last recession.”
Chris Williamson, chief business economist at IHS Markit, said: “A sharp deterioration in service sector growth leaves the economy flatlining in November as Brexit concerns intensified. Measured across services, manufacturing and construction, the survey results suggest that the pace of economic growth has stalled. With the exception of July 2016, when business slumped in the immediate aftermath of the EU referendum, November saw the worst performance since February 2013.”
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