UK services sector suffers worst performance in eight months

(Sharecast News) - The UK's services sector suffered its worst performance in eight months in September amid subdued demand and cutbacks to non-essential spending, according to a survey released on Wednesday. The headline seasonally adjusted S&P Global/CIPS services PMI business activity index fell to 49.3 from 49.5 in August, coming in below the 50.0 mark that separates contraction from expansion for the second month in a row.

This marked the lowest level since January, but was above the flash estimate of 47.2.

The seasonally-adjusted composite PMI printed at 48.5 in September, down from 48.6 the month before but above the flash estimate of 46.8.

Tim Moore, economics director at S&P Global Market Intelligence, said: "Service sector activity remained on a negative trajectory in September as cutbacks to non-essential business and consumer spending weighed on sales volumes. Although only modest and slower than indicated by the earlier 'flash' PMI reading, the downturn in UK service sector output was the greatest seen since the beginning of this year and stood in contrast to solid growth during the spring months.

"Survey respondents often suggested that a combination of elevated borrowing costs and subdued economic conditions had led to lower new business intakes. A renewed decline in export sales also acted as a headwind to order books during September, led by weaker demand across Europe."