Survey suggests UK economy is 'losing momentum' following strong growth

07 Mar

The UK economy has started to slow following ‘impressive growth’ at the end of 2016, according to the latest Markit/CIPS Purchasing Managers’ Index (PMI) for the UK’s services sector.

The services PMI for February fell to 53.3 from a figure of 54.5 in January, representing a five-month low. Despite this, it remains above the threshold that separates growth from contraction: a PMI reading below 50 indicates contraction.

A ‘softer pace of business growth’ and weaker consumer spending have contributed to the slowdown.

Chris Williamson, Chief Business Economist at IHS Markit, commented: ‘A further slowdown in UK business activity growth in February adds to the evidence that the economy has lost momentum after the impressive expansion seen at the end of last year.

‘Inflationary pressures remained the highest for six years as firms struggled with rising costs associated with the weak pound, but optimism about the year ahead remained elevated by recent standards.’

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