- Chris Williamson, Markit economist
Business activity in the UK's dominant services sector, which accounts for 88% of the whole economy, cooled sharply in February amid concerns about global economic slowdown, market turbulence and the possibility of Brexit. The Markit/CIPS services PMI plunged to 52.4 in February, down from 55.6 in the prior month, marking the lowest level since March 2013. The headline measure came in against economists projections of 55.1. Growth of both total business activity and new business were the weakest since March 2013, forcing firms to increase employment at the slowest pace in more than two years. The data followed two similar surveys that track activity in the construction and manufacturing sectors, which also fell well short of expectations. The UK construction PMI for February plunged to a 10-month low, while the manufacturing PMI plummeted to a 34-month low, as economic uncertainty weighs on industrial sector.
Britain's all-sector PMI declined to 52.9 in February, down from 56.1 in the prior month, hitting the lowest level since April 2013. The UK's gross domestic product now looks on track to grow by just 0.3% in the first quarter of 2016, Markit estimated, compared with the 0.5% rate in the final three months of 2015, marking the weakest performance since late 2012.
© Dukascopy Bank SA