by Andy Bruce
LONDON, Sept 22 (Reuters) – British private sector activity struggled more than expected in September, with unemployment rising and the risk of recession increasing, the monthly S&P Global CEO survey showed. purchases published Friday.
The S&P Global/CIPS services sector PMI index in “flash” version fell this month to 47.2 from 49.5 in August, while the 50 mark separates growth and contraction in activity.
This is the lowest level since the January 2021 lockdown following the COVID-19 pandemic and is also lower than the figure of 49.2 predicted by economists polled by Reuters.
If we exclude the period of the pandemic, the index has never fallen this low, and to find such a low, we have to go back to the global financial crisis of 2008.
The employment sub-index, for its part, showed the largest drop ever recorded outside the pandemic period.
The Bank of England (BoE), which interrupted its long series of interest rate increases on Thursday due to the slowdown in the British economy, had access to this data before making its decision.
S&P Global noted that the new data supported forecasts of a GDP contraction of around 0.4% this quarter.
“The disappointing results from September’s PMI survey mean a recession looks increasingly likely in the UK,” said Chris Williamson, chief economist at S&P Global.
The S&P survey also showed a further decline in inflationary pressures on businesses, despite several reports of strong wage growth.
“Wage growth has been a major concern in the inflation outlook, but the survey now shows a sharp fall in employment, the biggest since 2009, while opportunities for wage renegotiation are rapidly eroding,” added Chris Williamson.
The manufacturing PMI index recovered in September, from 43.0 to 44.2, but still remains in negative territory.
The composite index, which tracks both the secondary and tertiary sectors, came out this month at 46.8, the lowest level since January 2021, compared to 48.6 in August and 48.7 expected by the consensus Reuters. (French version Claude Chendjou, edited by Blandine Hénault)
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