UK Services Growth Slows Sharply in October as Uncertainty Weighs – PMI

UK Services Growth Slows Sharply in October as Uncertainty Weighs – PMI

LONDON, (Reuters) – Mounting economic uncertainty in Britain hit growth in its services sector much more than expected last month, according to a survey on Wednesday that signalled a significant end-of-year slowdown in the country’s recovery.

Wednesday’s Markit/CIPS services purchasing managers’ index (PMI) sank to a 17-month low of 56.2 in October from 58.7 in September, weaker than even the gloomiest forecast in a Reuters poll of analysts.

While the index was still above the 50 threshold that marks growth and higher than the historic average, it represented the latest in a string of weaker-than-expected British economic indicators.

Bank of England policymakers meeting this week will pay close attention to the survey as they gauge when to start finally raising interest rates.

Britain’s economy now looks on track to grow around 0.5 percent in the last three months of 2014 compared with 0.7 percent in the third quarter, survey compiler Markit said. The Bank last month said it expected fourth-quarter growth of 0.8 percent.

Markit also said Britain’s economic growth could weaken further still.

A mix of worries about the euro zone, the risk of a sharp slowdown in China, uncertainty about U.S. monetary policy — plus geopolitical fears — all tempered the service sector’s recovery last month, said Markit chief economist Chris Williamson.

Read more at Reuters