UK business activity in September most likely since early 2021 -PMI slips.

LONDON, Oct 5 (Reuters) – Last month, British businesses experienced the sharpest drop in activity since the start of last year, although the decline was slightly smaller than initially estimated, a survey showed on Wednesday.

The latest S&P Global UK Composite Purchasing Managers’ Index fell to 49.1 in August from 49.6 in September, the lowest reading since January 2021 when much of the country was still in a Covid-19 lockdown.

Any reading below 50 means contractions in motion.

While the reading was an improvement on the initial “flash” reading of 48.4, service companies, which make up the bulk of the private sector economy, were the best in terms of outlook since the outbreak began in May 2020.

Overall, the survey echoes other indicators that suggest Britain’s economy is flirting with recession.

“Businesses in the service sector revised up their growth estimates for the most in two-and-a-half years in September, which respondents attributed to concerns about falling earnings and an unfavorable outlook for the global economy,” said Tim Moore, director of economics. S&P Global Market Intelligence.

The PMI for the services sector fell to 50.0 from 50.9 in August, indicating a slowdown but still better than the flash reading of 49.2.

Both domestic and foreign new orders fell in September, with survey respondents blaming Brexit and a weak global economy, as well as lower confidence and customers cutting back on spending.

Inflation remained close to a record high in May, as businesses reported “unsustainable” price increases due to higher payments for wages, energy and supplies.

Reporting by Andy Bruce; Editing by Susan Fenton

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