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| UK service sector activity falls in December | UK service sector activity falls in December |
| (35 minutes later) | |
| Activity in the UK's services sector fell for the first time in two years in December, a survey has suggested, raising fears of yet another recession. | |
| The href="http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10559" >PMI services index from Markit/CIPS fell to 48.9 in December, down from 50.2 in November. Any score below 50 indicates the sector is shrinking. | |
| Markit blamed the contraction on a fall in new business. | Markit blamed the contraction on a fall in new business. |
| It said the numbers suggested the UK economy shrank by 0.2% in the final three months of 2012. | |
| The UK emerged from a double dip recession last summer with growth of 1% in the three months to September. | |
| "The first fall in service sector activity for two years raises the likelihood that the UK economy is sliding back into recession," said Chris Williamson, chief economist at Markit. | "The first fall in service sector activity for two years raises the likelihood that the UK economy is sliding back into recession," said Chris Williamson, chief economist at Markit. |
| 'Continuing uncertainty' | |
| The estimate of a 0.2% fall in GDP for the final quarter is worse than predicted by other forecasters. | |
| Separate purchasing managers' indexes (PMIs) released earlier in the week indicated that the manufacturing sector had expanded last month, but that the construction sector had continued to contract. | |
| "The underlying trend is one of continuing uncertainty," said David Noble, chief executive at the Chartered Institute of Purchasing and Supply. | |
| "Businesses are holding back on investment, leading to falls in employment and increased levels of spare capacity. At the same time, costs are increasing and businesses are unable to pass these on because of competitive pressures." | |
| In December, the government's Office for Budget Responsibility said it expected the economy to have shrunk by 0.1% in 2012 as a whole. |