UK service sector contracted in August

In the UK, the service sector, which accounts for around 80 per cent of the country’s economy, was reported to have contracted in August.

The S&P Global/CIPS statement states that in August of this year the purchasing managers’ index (PMI) for the country’s services sector fell to 49.5.

The PMI data for the services sector in the country was 51.5 in the previous month.

In the PMI data, above 50 is interpreted as sector growth, below this level as sector contraction.

“After its modest recovery over the past six months, the service industry is now clearly feeling the impact of rising interest rates on customer demand,” said Tim Moore, head of global market research at S&P.

Noting that concerns about the broader business environment also reduced spending in the services sector in August, Moore said: “Businesses said faltering economic growth and persistent inflation were putting pressure on the outlook.” (AA)