UK service

The UK service sector saw sharp slowdown in October, according to a survey of executives.

The IHS Market services purchasing managers’ index revealed the slowest pace of growth since the beginning of the year.

The survey for the sector, which includes hotels, restaurants, transport and finance, showed more cautious spending patterns, as Brexit uncertainty continues to bite.

The monthly purchasing managers’ index from IHS Markit/CIPS dipped to 52.2 in October from 53.9 in September, marking the weakest growth since March.

“The disappointing service sector numbers bring mounting evidence that Brexit worries are taking an increasing toll on the economy,” said Chris Williamson, chief business economist at IHS Markit.

Commenting on the latest services sector figures, Andrew Wishart of Capital Economics says: “Based on past form, the all-sector PMI in October is consistent with GDP growth of about 0.2%. If sustained over the remainder of the year, that would leave annual growth in 2018 at 1.3%, the weakest since the financial crisis.

“But we are optimistic on the outlook for growth next year. So long as a Brexit deal is agreed, we think that a rebound in investment, sustained growth in real wages, and supportive fiscal policy could see growth accelerate to just over 2%.”

The UK services sector makes up about 80% of the nation’s economy, including everything from restaurants, hotels to banking.