Britain’s economy proved more resilient than initially thought last month, with business activity continuing to grow despite the introduction of fresh lockdown restrictions and the end of the Eat Out to Help Out scheme, a major survey showed.
The IHS Markit/CIPS Purchasing Managers’ Index (PMI) for the services sector dropped to 56.1 in September from August’s five-year high of 58.8, but the decline was smaller than an initial “flash” estimate of 55.1 had indicated.
Readings above 50 on the survey indicate a growth in activity.
The composite PMI, which includes manufacturing data released last week, fell to 56.5 from August’s six-year high of 59.1 – again a smaller drop than first reported.
“The UK service sector showed encouraging resilience in September, with business activity continuing to grow solidly despite the government’s Eat Out to Help Out scheme being withdrawn,” said IHS Markit chief economist Chris Williamson.
“Unsurprisingly, spending in the restaurant sector slumped after spiking higher in August, and many other consumer services activities showed a similar slide back into contraction as renewed lockdown measures were introduced, causing the overall rate of expansion to moderate.
Growth in the UK’s services sector was supported by a further uptick in new work, the survey showed, which posted its third successive increase. Growth in new business was softer than the previous month, while foreign business continued to fall sharply amid a lack of international tourism.
Meanwhile new data showed the eurozone’s economic recovery floundered in September, with the reintroduction of coronavirus restrictions in some areas helping send the bloc’s service sector back into contraction.
The eurozone’s final composite PMI reading fell to 50.4 last month compared to August’s 51.9.
The reading was dragged down by the PMI for services industries, which accounts for around two thirds of GDP, which slumped to 48.0 from August’s 50.5. The final figure was slightly better than a preliminary 47.6 estimate.