The UK’s services sector, which makes up 80 per cent of the economy, may have seen its weakest growth for over two years in September, a survey of firms reveals.
Sterling dipped by nearly half a cent against the dollar after Markit’s purchasing managers’ index, published this morning, posted a score of 53.3. While the score is above 50, signalling a continuation in growth last month, it marks a drop on August’s 55.6 and signals the slowest growth since April 2013.
“The further softening of growth in the services sector must now be causing some concern for the sustainability of the recent recovery in the UK economy,” said David Noble, chief executive of Chartered Institute of Procurement & Supply, which helps compile the survey data.
The UK’s economic recovery has been heavily weighted toward the services sector, with manufacturing struggling amid weak economic growth in the UK’s main export markets.
Noble attributes the shock drop in the services PMI to a slowdown in China this year.
“It appears that when China sneezes, the world catches a cold as some companies cited the region as a cause for worldwide concern.”
A drop in growth puts the UK at risk of losing its crown of having the fastest growing economy in the G7 group of countries, which official figures last week confirmed it had held for the last two years.