Activity in the UK services sector contracted again in November amid the fastest decline in new business volumes since January 2021, according to a survey released on Monday.
The S&P Global/CIPS purchasing managers’ index for the sector was unchanged versus October at 48.8. A reading below 50.0 indicates contraction, while a reading above signals expansion.
The composite PMI remained at 48.2 in November, coming in a touch below the initial estimate of 48.3.
Once again, firms attributed the decline to a reduction in new sales volumes amid reports of ongoing caution among businesses and belt-tightening among households as the cost-of-living crisis takes its toll.
Chris Williamson, chief business economist at S&P Global Market Intelligence, said: “A further economic contraction signalled by the PMI surveys hints at a growing recession risk for the UK. A change of government and its new economic policies may have helped arrested some of the financial market volatility after September’s ‘mini-budget’ but the economic picture remains stubbornly unchanged.
“The overall rate of economic contraction has held steady compared to October, indicative of GDP falling at a quarterly rate of 0.4%. As such, this is the toughest spell the UK economy has faced since the global financial crisis excluding only the height of the pandemic.”
