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UK services sector sees sharp slowdown in May | |
(35 minutes later) | |
Growth in the services sector saw its biggest slowdown in almost four years in May, a survey suggests, raising fears about the economy's strength. | |
The closely watched purchasing managers' index (PMI) from Markit/CIPS fell to 56.5 from 59.5 in April - its steepest fall since August 2011. | The closely watched purchasing managers' index (PMI) from Markit/CIPS fell to 56.5 from 59.5 in April - its steepest fall since August 2011. |
A figure above 50 still indicates expansion, but Markit chief economist Chris Williamson said the "lacklustre growth picture" was a "concern". | A figure above 50 still indicates expansion, but Markit chief economist Chris Williamson said the "lacklustre growth picture" was a "concern". |
It's the weakest figure in five months. | It's the weakest figure in five months. |
Mr Williamson said that, when taken with surveys of the manufacturing and construction sectors published earlier this week, the data pointed to the economy growing at a quarterly rate of just 0.4% in May. | |
He added this "raised doubts about the ability of the economy to rebound convincingly from the weakness seen at the start of the year". | |
In the first three months of the year, the UK's economy grew by 0.3%, official figures have shown, slowing from the 0.6% growth seen in the final quarter of 2014. | |
The UK services sector is by far the largest part of the economy, accounting for about three quarters of economic activity. | The UK services sector is by far the largest part of the economy, accounting for about three quarters of economic activity. |
Markit said anecdotal evidence suggested that the sharp slowdown in May was linked to business uncertainty surrounding the general election. | |
"Rate hikes later this year should not be ruled out: there are signs that the disappointing rate of expansion is only temporary," Mr Williamson added. | "Rate hikes later this year should not be ruled out: there are signs that the disappointing rate of expansion is only temporary," Mr Williamson added. |
The pound fell sharply against other currencies following the release of the PMI survey. Against the dollar it dropped by nearly a cent to $1.5273. |
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