Investing.com – Service sector activity in the U.K. slowed more-than-expected in October, industry data showed on Thursday.
In a report, market research group Markit said the seasonally adjusted Markit/CIPS Services Purchasing Managers Index declined by 1.6 points to 51.3 in October from 52.9 in September.
Analysts had expected the index to decline by 0.9 points to 52.0 in October.
On the index, a level above 50.0 indicates expansion in the industry, below 50.0 indicates contraction.
U.K. service sector growth was maintained for a tenth successive month in October, albeit at a modest rate. Incoming new business also rose at a slower pace, despite a reduction in average output charges, while companies continued to adopt a cautious attitude with regard to employment as staffing levels fell fractionally.
More positive was a marked improvement in business confidence to the strongest since May, following September’s two-and-a-half year low.
Commenting on the report, Chris Williamson, chief economist at Markit said, “Another rather disappointing survey adds to fears that the U.K. recovery continued to lose momentum at the start of the fourth quarter.”
He added that, “With manufacturing contracting, the October PMI surveys are signaling a heightened and substantial risk that the U.K. could slip back into recession.”
Following the release of that data, the pound was modestly lower against the U.S. dollar, with GBP/USD dipping 0.08% to trade at 1.5935.
Meanwhile, European stock markets were broadly lower. The EURO STOXX 50 slumped 0.6%, France’s CAC 40 fell 0.45%, the FTSE 100 edged 0.2% lower, while Germany's DAX declined 0.4%.
In a report, market research group Markit said the seasonally adjusted Markit/CIPS Services Purchasing Managers Index declined by 1.6 points to 51.3 in October from 52.9 in September.
Analysts had expected the index to decline by 0.9 points to 52.0 in October.
On the index, a level above 50.0 indicates expansion in the industry, below 50.0 indicates contraction.
U.K. service sector growth was maintained for a tenth successive month in October, albeit at a modest rate. Incoming new business also rose at a slower pace, despite a reduction in average output charges, while companies continued to adopt a cautious attitude with regard to employment as staffing levels fell fractionally.
More positive was a marked improvement in business confidence to the strongest since May, following September’s two-and-a-half year low.
Commenting on the report, Chris Williamson, chief economist at Markit said, “Another rather disappointing survey adds to fears that the U.K. recovery continued to lose momentum at the start of the fourth quarter.”
He added that, “With manufacturing contracting, the October PMI surveys are signaling a heightened and substantial risk that the U.K. could slip back into recession.”
Following the release of that data, the pound was modestly lower against the U.S. dollar, with GBP/USD dipping 0.08% to trade at 1.5935.
Meanwhile, European stock markets were broadly lower. The EURO STOXX 50 slumped 0.6%, France’s CAC 40 fell 0.45%, the FTSE 100 edged 0.2% lower, while Germany's DAX declined 0.4%.