Business boom dented by euro area troubles

Chris Papadopoullos
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UK BUSINESSES lost some momentum in September, with survey data showing that most regions have been impacted by economic troubles across the Channel.

A purchasing managers’ index (PMI) released by Lloyds Bank, which records business activity, scored 57.4 for the UK average, down from 59.3 in August.

Anything above 50 implies growth and although this figure is above that level, it is a 15-month low.

The researchers attribute a large part of the decline to falling export orders as the Eurozone, the UK’s largest export market, looks at risk of entering a third dip.

Not only did the currency union stall in the second quarter of the year, PMIs since then have pointed to further slowdown. The situation is especially bad in France – the country’s government debt was on Friday downgraded by ratings agency Standard and Poor’s.

Uncertainty from the Scottish referendum on independence also appears to have taken its toll on the country’s private sector. Scotland’s PMI came in at a 22-month low of 51.5.

London cooled down too, with the regional figure falling to 56.9 in September from 58.7 in August.

The anomaly was in the east of England, which scored a record high of 60.5, suggesting the region’s firms are expanding at their fastest pace since the survey began.

“While business growth across England and Wales is slightly slower than recent months, September’s survey confirmed that the economic recovery is continuing,” said Tim Hinton, managing director at Lloyds Banking Group.

“Sustained economic improvements mean that business activity remained positive across all regions at the end of the third quarter along with private sector job creation. This trend should continue as underlying conditions become more favourable and businesses invest for the long term.”