Other PMI’s released by Markit have also shown huge recent downturns in sentiment, including in the manufacturing and construction industries, and have shown negative figures for the United Kingdom as a whole.
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Activity in Britain’s manufacturing sector has slumped to its lowest level for more than three years, new data reveals.
Like the better-known manufacturing PMI, the index measures changes in activity levels in China’s steel industry from one month to the next.
Markit said new order growth at service companies slowed in July, and service employment has fallen for four months for the first time.
He said: “The extent of any downturn remains highly uncertain, and dependent on any policy reaction to the weak data. However, the unprecedented month-on-month drop in the all-sector index has undoubtedly increased the chances of the United Kingdom sliding into at least a mild recession”.
Services firms are bracing themselves for worse to come, according to the survey, which showed a record drop in business confidence for the year ahead and optimism at its lowest level since February 2009.
The slower rate of contraction was attributed to improved readings in new domestic and export orders, as well as production.
This could put more pressure on the Bank of England to cut interest rates to stimulate economic growth by encouraging spending.
Economists are expecting the Bank of England to cut rates to 0.25%.
The report comes not long after it was revealed that vehicle manufacturer Ford is considering closing down its last two United Kingdom factories, amid affordability concerns related in part to the vote to leave the EU.
The slowdown following June’s vote to leave the European Union means that Britain’s economy is now expected to shrink by 0.4 per cent in the three months to September.
However, the growth rate retreated from an 11-month high of 52.7 in June.
It seems nearly a foregone conclusion that this week will see the Bank of England slash its growth forecasts and take interest rates down to a record low of 0.25%.
LONDON-Output in the United Kingdom services sector shrank in July at the fastest pace since 2009 following the country’s decision to exit the European Union, according to survey data, a finding that will increase expectations the Bank of England will act on Thursday to cushion the economy.
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The Caixin services PMI is calculated by Markit, a global financial information services provider, based on data from monthly replies to questionnaires sent to purchasing executives at more than 400 companies.
