SLOWDOWN in the UK economy has spread to the service sector, data from Markit revealed yesterday, adding to worries that the next two quarters will register contraction in GDP – an official recession.
The purchasing managers’ index (PMI) fell from 51.5 in September to 51, indicating slowing growth. Numbers over 50 represent expansion.
However, the employment PMI fell to 49.8, from 50.2, suggesting jobs are being lost in the sector.
“The balance suggests that the services sector might just be growing,” said Capital Economics’ Samuel Tombs. “However, taken together with manufacturing and construction, the three surveys suggest that the whole economy contracted in October.”
Meanwhile, according to Nielsen’s consumer confidence survey, out today, 86 per cent think the UK is currently in recession and 76 fear job prospects will worsen in 2012 – up from 73 per cent three months ago.
“Confidence is lower than at any time last year,” said the British Retail Consortium’s Stephen Robertson. “Rising costs and low wage rises put incomes under huge pressure.”
Jobseekers, too, face a gloomy future, according to totaljobs.com.
Over a quarter of those looking for work still expect to be doing so in twelve months, its study found.