Economy continues to weaken, influential report finds

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Tea

Britain’s economic growth fell to a 20-month low so far in September, as living costs hit households and mourning periods for the Queen weighed on activity.

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According to a closely watched survey, both the services and manufacturing sectors have shrunk so far this month.

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The S&P Global/CIPS Flash UK Composite Purchasing Managers’ Index (PMI) gave the economy a score of 48.4, well below what experts had forecast.

This is another month of fall after a 49.6 score in August, but the flash reading is provisional, so the final score for September may still change.

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That means the economy is shrinking, according to the survey, which asks thousands of businesses about their business.

Britain’s economic crisis deepens in September as declining business activity indicates the economy is likely to slump

According to the consensus supplier by Pantheon Macroeconomics, this is less than the score of 49 that analysts had predicted.

Analysts said the ten days of mourning for the Queen would have led to the suspension of work for the services sector, which would weigh on the August score.

But most of the decline was due to rising costs for customers around the UK.

“There were several reports that a slowdown in sales amid the cost of living crisis and rising economic uncertainty weighed on the level of activity in September,” the report said.

It said the contraction in the economy is the sharpest since January 2021, when the UK was in lockdown.

Chris Williamson, chief business economist at S&P Global Market Intelligence, said inflation is higher than at any point in the past two decades.

“The UK economic crisis deepened in September as a decline in business activity indicated the potential for a slowdown in the economy,” he said.

“Companies report that rising cost of living, linked to the energy crisis, and growing concerns about the outlook, are reducing demand and production levels to an extent not seen since the 2009 pandemic lockdowns. And except for the shock of the early 2016 Brexit referendum.

“Inflationary pressures have been ongoing more than at any time in the more than two decades of survey history before the pandemic.

“Lack of renewable supplies, rising energy prices and rising import costs associated with a weaker pound are adding to cost pressures, meaning the overall rate of inflation will remain a major concern for policymakers at the Bank of England.”

Credit: www.standard.co.uk /

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