HomeIndiaUK business slowdown, increased risk of recessionSEXI News

UK business slowdown, increased risk of recessionSEXI News

UK business slowdown, increased risk of recession

The slowdown in UK businesses intensified this month as they grapple with rising costs and faltering demand, according to a survey on Friday that pegged the growing risk of a recession at home.

Just as Finance Minister Quasi Quarteng was released due to new Prime Minister Liz Truss’s economic agenda, the S&P Global/CIPS Flash Composite Purchasing Managers’ Index (PMI) fell from 49.6 in August to 48.4.

This is the lowest reading since the COVID-19 lockdown of January last year. A Reuters poll of economists pointed to a reading of 49.0. Any reading below 50 signifies a contraction in activity.

The PMI could raise new questions about the health of the UK economy, after consumer confidence fell this month to the lowest level since records began in 1974, according to a survey published earlier on Friday.

Chris Williamson, chief business economist at S&P Global, said: “The UK economic crisis deepened in September as a decline in business activity indicates the economy is likely to slow down.”

He said the survey’s forward-looking projections suggested that the last months of 2022 would be worse.

Quarteng will give more details about the government’s fiscal plans, which could amount to more than 150 billion pounds ($169.02 billion) of stimulus money – something that could put a floor on the decline in business confidence.

The PMI’s gauge of future production fell to its lowest level since May 2020, when Britain was hit by its first COVID-19 lockdown.

Activity is contracted in both the manufacturing and service industries.

The PMI for the services sector fell from 50.9 in August to 49.2 in September, the weakest reading since January 2021.

While the manufacturing PMI rose from 47.3 to 48.5, most of the improvement reflects poor supply chain performance, reflecting a decrease due to stronger demand in normal times but not this time.

“Firms often cited lower output volumes due to weak intake of new business, although there were also reports that input constraints, particularly electronics, had disrupted production at some units,” S&P Global said.

S&P Global said export orders shrank in both the manufacturing and services sectors, despite the pound falling to a 37-year low against the dollar.