Future Retirement Success
  • Politics
  • Business
  • Investing
  • Stocks
  • Politics
  • Business
  • Investing
  • Stocks

Future Retirement Success

Business

Recession fears rise as services contract, purchasing managers’ index shows

by December 6, 2022
December 6, 2022
Recession fears rise as services contract, purchasing managers’ index shows

The biggest sector of the economy remained in a downturn last month as new orders continued to fall owing to the cost of living crisis, a closely watched survey shows.

The monthly purchasing managers’ index (PMI) by S&P Global and CIPS showed that the service sector contracted for a second month in a row as economic uncertainty hit demand.

Responses to the survey of 650 service companies between November 11 and 28 produced a reading of 48.8 on the index, which was below the 50 mark separating growth from contraction. The level was unchanged from October and was in line with economists’ expectations.

Services account for the vast majority of economic activity in the UK, so a slump in the sector adds to fears that the country is heading into a recession.

Sales fell for a third consecutive month and recorded the sharpest drop since the lockdown in January last year. Businesses said that budgets were tightening among both their domestic and foreign clients.

Inflation has ripped through the global economy since the coronavirus pandemic and the escalation of the Russia-Ukraine war in February, putting many of the world’s biggest economies on course for a downturn next year as high prices weaken demand.

The prices set by companies for their services rose for a 23rd consecutive month but the rate of inflation fell to its lowest level in ten months as lower demand made it less likely that companies could raise prices and maintain sales.

Inflation hit its highest level in more than four decades at 11.1 per cent in October, the latest figures from the Office for National Statistics showed.

Increased political stability in the UK has lifted business confidence from its low in October but optimism among business leaders is at one of the lowest levels recorded over the past decade.

Chris Williamson, chief business economist at S&P Global market intelligence, said the UK economy was facing its toughest time since the 2008 financial crisis, excluding the pandemic. “A further contraction signalled by the PMI surveys hints at a growing recession risk for the UK. The overall rate of economic contraction has held steady compared to October, indicative of gross domestic product [GDP] falling at a quarterly rate of 0.4 per cent.”

He added: “Inflows of new work fell at an increased rate, indicating slumping demand for goods and services, forcing companies to pare back their hiring, resulting in only very modest employment growth.”

Martin Beck, chief economic adviser to the EY Item Club, said: “Combining the services reading with November’s manufacturing survey, the composite PMI was also unchanged at 48.2, the fourth successive sub-50 contractionary reading.”

The results added to evidence that GDP, which fell by 0.2 per cent in the third quarter of the year, was on course to drop again in the present quarter, he said, adding that falling activity would probably lead the Bank of England’s monetary policy committee to slow the pace of interest rate rises in its meeting on December 15.

The central bank implemented its biggest rate rise on record last month, when it lifted the base rate by 0.75 percentage points to its present level of 3 per cent.

Read more:
Recession fears rise as services contract, purchasing managers’ index shows

0
FacebookTwitterGoogle +Pinterest
previous post
UK retailers boosted by November sales of winter coats and hot water bottles
next post
PM to hold cabinet crisis talks after rail union adds more Christmas strikes

You may also like

Bank of England Raises Interest Rates to 5.25%:...

August 3, 2023

Transforming Education: How Roedean School Headmaster Oliver Blond...

February 8, 2023

Secrets of Success: David Davies, Founder and MD...

October 23, 2023

Tech chiefs debate cyber threat in Parliament

June 13, 2023

Thomas Flohr Offers One-of-a-Kind Wellness Program for VistaJet...

January 26, 2024

Craft gin maker British Honey flies towards administration...

March 22, 2023

Extraordinarily low unemployment means labour shortages of very...

September 13, 2022

Microsoft and Airbnb commit to supporting a lasting...

August 11, 2022

Eton College to raise fees by 20% after...

August 31, 2024

The Rise and Fall of Ethical ESG Funds:...

August 4, 2023

    Get free access to all of the retirement secrets and income strategies from our experts! or Join The Exclusive Subscription Today And Get the Premium Articles Acess for Free

    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Trump warns Rand Paul he’s playing into ‘hands of the Democrats’ with ‘Big, Beautiful Bill’ opposition

      June 1, 2025
    • White House urges Iran to accept nuclear deal as IAEA reports uranium enrichment spike

      June 1, 2025
    • Israel hostage deal in doubt as Hamas adds demands, US envoy calls terms ‘unacceptable’

      May 31, 2025
    • Iran condemns Austria over report on advanced nuclear weapons program

      May 31, 2025
    • Michelle Obama facing backlash over claim about women’s reproductive health

      May 31, 2025
    • Hamas agrees to release 10 more hostages

      May 31, 2025

    Categories

    • Business (8,105)
    • Investing (2,000)
    • Politics (15,453)
    • Stocks (3,119)
    • About us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: futureretirementsuccess.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 futureretirementsuccess.com | All Rights Reserved