The downturn throughout British companies was worse than anticipated in January, hitting a two-year low and amplifying fears that the economic system was sliding into recession, a survey revealed on Tuesday.
The S&P World’s flash UK composite buying managers’ index, a gauge of enterprise confidence, fell to 47.8, from 49 in December, sinking additional under the 50 threshold for progress.
A Reuters ballot of economists forecast a studying of 49.1.
“Weaker than anticipated PMI numbers in January underscore the chance of the UK slipping into recession”, mentioned Chris Williamson, chief enterprise economist at S&P World Market Intelligence.
The providers sector drove the downturn, with enterprise exercise falling to 48 in January from 49.9 within the earlier month.
Factories, which account for lower than 10 per cent of Britain’s financial output, fared higher, because the manufacturing PMI rose to a four-month excessive of 46.7 in January, up from 45.3 in December.
The survey added to different indicators that the economic system was contracting regardless of worth pressures easing from historic highs.
Separate information final Friday confirmed that retail gross sales dropped in December, whereas shopper confidence remained close to an all-time low for the ninth month in a row in January, marking the longest interval of pessimism in almost 50 years.
The information stood in stark distinction to composite PMI readings from different European international locations, additionally launched on Tuesday, which confirmed that eurozone exercise returned to progress in January for the primary time since June 2022.
The Financial institution of England raised rates of interest to three.5 per cent in December, indicating that extra will increase have been possible regardless of the economic system sliding into recession, because the central financial institution tries to tame inflation that hit a 41-year excessive in October.