U.K. Services Weaker Than Expected Even Before New Lockdown
(Bloomberg) -- The U.K.’s dominant services sector expanded at the slowest pace since June last month, a sign that the economy was weak even before new coronavirus curbs were introduced.
IHS Markit’s Purchasing Managers Index for the industry stood at 51.4 in October, down sharply from 56.1 the previous month and below a flash estimate. Employment fell for an eighth month, and firms reported a lack of new work.
The report highlights the pressure on Bank of England policy makers, meeting this week, to increase bond-buying to support growth. The second nationwide lockdown in England will start this week and last to at least Dec. 2, further putting the brakes on activity.
Services were “close to stalling even before the announcement of lockdown,” said Tim Moore, an economist at Markit. “The U.K. economy seems on course for a double-dip recession this winter and a far more challenging path to recovery in 2021.”
©2020 Bloomberg L.P.