Mounting concerns about the possible impacts of Brexit have finally seemed to catch-up with the United Kingdom’s service sector as expansion was recorded to be happening at very modest pace last month.
The sector still recorded strong sales due to consumer spending which underpinned the modest growth while business to business orders fell considerably back leaving the overall sales growth at its slowest in over a year.
The Markit/CIPS Purchasing Manager’s Index (PMI) of the sector showed that despite an unspectacular growth the service sector remains on a solid footing.
Markit notes that the survey projects the UK to be on track for weak growth this quarter, the third with this year alone. With the last quarter ending in September recording a GDP growth of a mere 0.3% the lowest among the G7 group of developed countries.
Delay In Decision Making Causing Uncertainty
Service providers say that the delay in decision making on large projects as well as a fall on in business to business sales are as a result of the growing uncertainty that is surrounding the Brexit process keeping business confidence at its weakest since the end of 2011.
In stark contrast to the UK’s slowing growth, the 19 eurozone countries continued to experience growth at a very strong pace. The third quarter ended with a flourish as growth accelerated to its highest in four months.
The PMI average for the currency bloc went up from 55.7 in August to 56.7 in September compared to the UK’s 53.6 in the same month. Markit says that the outlook remains promising for the Eurozone “with business optimism rising to its highest in four months.”