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Growth in the UK private sector has slowed as businesses and customers brace for BudgetAccording to new data.
The S&P Global Flash UK Composite Purchasing Managers’ Index (PMI) recorded a reading of 50.5 in November, slipping from 52.2 in October.
Flash statistics are based on preliminary data. Any score above 50.0 indicates that activity is growing while any score below means it is shrinking.
Still, they were weaker than widely expected, with economists predicting a reading of 51.8 for the month.
Experts said the data indicated a decline in business confidence amid widespread caution about the state of Britain’s economy.
chris williamsonChief business economist at S&P Global Market Intelligence said: “The November flash PMI The surveys revealed disappointing news on Britain’s economy.
“Economic growth has stalled, jobs have been lost and business confidence has been eroded.
“This mess has been attributed in part to stalled spending decisions autumn budget“But there is a real possibility that this pause could turn into a recession.”
He said there are growing concerns that business conditions will remain difficult in the coming months.
Services sector companies have recorded slow growth this month, with “many” businesses linking this to “increased customer caution” ahead of the Budget on November 26.
However, manufacturing businesses reported an increase in activity this month.
However, total new business was down across the industry, following a decline following growth in the previous three months.
Economists also said the data suggests many people have held back spending due to rumors about higher taxes in the budget.
Thomas Pugh, chief economist at RSM UK, said: “The sharp fall in the flash composite PMI to 50.5 in October suggests that heightened speculation about upcoming tax rises in the Budget is more clearly weighing on sentiment.
“Indeed, the decline in PMIs, decline in consumer confidence and sharp decline in retail sales in October paint a clear picture of nervous consumers and businesses curbing activity.”
Earlier on Friday, separate figures were presented National Statistical Office Retail sales unexpectedly fell in October for the first time since May due to growing consumer caution.