UK: Economy heading for contraction, PMIs suggest

LONDON, Sept 4 (Reuters) – Britain’s economy ended August on much weaker footings than initially estimated with activity contracting for the first time since February 2021, a sign of an entry into recession, show the final results of IHS Markit’s monthly survey of purchasing managers on Monday.

The composite PMI index, which brings together services and manufacturing industry, was revised down to 49.6 against an initial estimate of 50.9.

The 50 mark separates contraction and expansion of activity.

The new data suggests the UK economy is on the verge of slipping into recession as soaring energy costs are in turn fueling inflation now in double digits.

“Demand for consumer-facing services like restaurants, hotels, travel and other leisure activities is collapsing under the weight of the rising cost of living,” said Chris Williamson, chief economist at S&P Global. .

The PMI services index fell to 50.9 in August against 52.5 in the first estimate. (Report Andy Bruce; French version Claude Chendjou, edited by Sophie Louet)

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