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\t\tRachel Reeves is managing a UK economy growing at a \u201csluggish pace\u201d, fresh data has suggested.\t<\/p>\n
Hopes of a quick recovery to the UK economy are fading as orders in the services sector fell at the fastest rate since Liz Truss\u2019 mini-budget in late 2022, fresh data has suggested.<\/p>\n
S&P Global\u2019s latest composite purchasing managers\u2019 index (PMI) showed a fall from a score of 52 in June to 51.5, which remains slightly above the 50-figure benchmark showing neutrality in output.\u00a0<\/p>\n
The figure was a slight upgrade on an earlier \u201cflash\u201d reading posted by S&P Global<\/a>.\u00a0<\/p>\n In concerning signs for the state of the UK economy, new orders fell at the fastest rate in nearly three years, with respondents in S&P Global\u2019s survey of 650 service sector companies suggesting clients were less confident about the global economy and their own business prospects.\u00a0<\/p>\n Pantheon Macroeconomics\u2019 Rob Wood and Elliott Jordan-Doak suggested this slowdown \u201cpoints to deterioration ahead\u201d though other surveys indicated orders could rebound.<\/p>\n Total workforce numbers across the services sector<\/a> also decreased to the greatest extent since February in a further indication that the UK jobs market is hamstrung by Rachel Reeves\u2019 high taxes and tight monetary policy.\u00a0<\/p>\n The UK\u2019s service sector constitutes about 80 per cent of the country\u2019s total gross value added (GVA), reflecting its dominance over manufacturing and other industries.\u00a0<\/p>\n \t\t\t\t\tRead more<\/p>\n \t\t\tUK\u2019s mid-sized firms at fastest growth since Labour elected<\/a><\/p>\n Services firm bosses said worries of higher payroll costs were holding back recruitment.\u00a0<\/p>\n UK economy holds out for interest rate cut<\/p>\n Respondents also said they would hike the prices of their products at a higher level to pass on the impact of higher labour costs onto consumers, though input price inflation had slowed to its lowest level so far this year.\u00a0<\/p>\n Looking to the year ahead, optimism slightly improved on the month given fears of high tariffs had eased slightly and looming interest rate cuts could boost consumer spending.\u00a0<\/p>\n Matt Swannell, chief economic adviser to the EY ITEM Club, said the \u201cmore modest pace\u201d of growth in the UK\u2019s services sector showed the UK economy\u2019s growth rate was \u201csluggish<\/a> and is expected to remain that way\u201d.\u00a0<\/p>\n \u201cWith the Monetary Policy Committee balancing signs of fragility in the labour market against evidence of lingering inflationary pressure, the committee will likely signal that further gradual interest rate cuts remain appropriate.\u201d<\/p>\n Swannell added that the month-to-month results can be erratic and was generally a \u201cpoor predictor\u201d of official output.<\/p>\n \t\t\t\t\tRead more<\/p>\n