According to the latest PMI survey data from Markit and CIPS, UK services sector grew at its weakest pace in over three years in April. The rate of expansion slowed for the third time in the past five months, coming in at 52.3 points, significantly worse than 53.5 points predicted and lower than 53.7 in March.
Business Activity Index hits 38-month low, fell from 53.7 to 52.3 in April, the lowest since February 2013 and indicative of only a muted rise in services output. Service sector employment continued to expand in April, but the pace of growth was the weakest in over two-and-a-half years, underlining the overall subdued nature of business conditions in the sector.
Input price inflation hit a 27-month high, but remained below the long-run survey average, and firms raised their own prices at a subdued pace. Cost pressures were linked by firms to rising fuel prices and the impact of the weaker pound.
“The slowdown in the service sector follows similar weakness in manufacturing and construction to make a triple-whammy of disappointing news on the health of the economy at the start of the second quarter.” said Chris Williamson, Chief Economist at Markit.
“The sector credited with being the main driver of the UK’s economic fortunes appears to be slowing down.” David Noble, Group Chief Executive Officer at the Chartered Institute of Procurement & Supply
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