Business activity is growing at its slowest pace since September 2016

Helen Cahill
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General Election - Economy
Rising input costs are becoming a problem for businesses (Source: Getty)

Business activity is growing at its slowest pace since September 2016, according to a survey of managers, suggesting that UK economic activity has "lost momentum".

IHS Markit's purchasing managers' index for the services sector fell to 53.3 in February - any figure below 50 denotes contraction.

The measure was down on the month before, when output stood at 54.5, and it was lower than expected. Analysts had predicted it to come in at 54.2.

Read more: Eurozone inflation just hit two per cent for the first time in four years

Samuel Tombs, chief UK economist at Pantheon Economics, said the survey showed the UK is now "enduring stagflation". He added that the services sector is now vulnerable due to rising prices; the survey showed that last month average input prices for businesses were rising at the fastest pace since August 2008.

Chris Williamson, chief business economist at IHS Markit, said: "A further slowdown in UK business activity growth in February adds to evidence that the economy has lost momentum after the impressive expansion seen at the end of last year.

"Weaker consumer spending was a key cause of slower service sector growth, suggesting that household budgets are starting to crack under the strain of higher prices and weak wage growth."

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