Fears are growing that the UK could be headed for recession, after “ominous” figures showed a downturn that has gripped manufacturing and construction spreading into the dominant services sector.
Services, which make up around four-fifths of the UK economy, saw their activity unexpectedly shrinking in September, according to a widely watched survey.
Firms reported the biggest drop in employment in nine years, with companies not replacing leaving staff and suffering from clients delaying orders because of Brexit. Services leaders were the least optimistic about growth since the EU referendum in July 2016.
The data suggests the wider UK economy could be contracting, with performance also declining in services, manufacturing and construction for a second month in a row for the first time in seven years.
It comes a day after the FTSE 100 index of Britain’s biggest companies suffered its worst day of losses since 2016, falling further than other European indices.
One analyst said there was “little time or vision” for a major turnaround this year, with heightened Brexit uncertainty hitting business investment and consumer spending in the run-up to Britain’s scheduled departure date of 31 October. Another said it raised the chances of the Bank of England cutting interest rates.
Source: UK Yahoo