Friday, September 22, 2023

UK business activity suffers biggest contraction in two and a half years

business activity in the United Kingdom It suffered its biggest contraction in the last two and a half years in August, with a “severe” decline in the manufacturing sector and a slowdown in services, according to the S&P Global/CIPS purchasing manager index published this Wednesday.

The first estimate of PMI index August puts business activity at 47.9 points, below the 50 integer mark that denotes contraction, and also less than the 50.8 in July.

S&P Global said in a statement that the preliminary results of its survey among companies indicate that the measures that have been taken in the United Kingdom to try to contain the inflation have increased the chances that the British economy will enter a recession.

“Companies are reporting a reduction in orders for goods and servicesas demand is being increasingly affected by the cost-of-living crisis, higher interest rates, export losses and concerns about the economic outlook,” the firm says.

The Bank of England has already raised its interest rates to 5.25%, their highest level in 15 years, and S&P Global believes that further increases in the price of money are “inevitable”.

Renewed doubts about the British economy led sterling to lose 0.49% against the US dollar today, to US$1.2669, and 0.43% against the euro, to €1.1687.

The CPI in the United Kingdom falls more than one point in July, to 6.8%, the lowest since February 2022


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