Business sentiment in the UK deteriorated more than expected in August amid a flagging industry. The purchasing managers’ index from S&P Global fell by 1.2 points to 50.9 points, as market researchers announced in London on Tuesday, according to an initial estimate. This is the lowest level since February 2021. Economists had expected an average drop to 51.0 points.
The mood in the industry has plummeted. The indicator fell by 6.1 points to 46.0 points. This indicates a recession for the sector as it is below the expansion threshold of 50 points. In the service sector, the decline was moderate. Here the indicator fell by 0.1 points to 52.5 points.
Rising interest rates, high living costs, labor shortages and tight supply chains are likely to continue to weigh on economic output in the coming months, said Annabel Fiddes, economist at S&P Global Market Intelligence.