The indicators and results of the British economy suggest that the country is at risk of recession.
According to data from the PMI survey prepared by S&P Global, the decline in private sector activity in September suggests a 0.4% decline in the country’s gross domestic product (GDP) in the third quarter of this year.
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Likewise, the preliminary estimate of the composite PMI this month was 46.8 points, compared to 48.6 points in August, which was the worst result in 32 months, according to the Europa Press agency.
However, the service sector also recorded a downward trend. According to PMI data, this point fell to 47.2 points, compared to 49.5 points in the eighth month.
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Thus, the chief economist of S&P Global Market Intelligence, Chris Williamson, described the results of the PMI of this country as disappointing and, for his part, announced that this general downturn is gaining momentum, which “gives little hope of an improvement in the near future.” .
Likewise, the manager assured that one of the factors threatening the British economy is the business and services problem, although this decreased in September, “the additions of new companies in the services sector also decreased for the second month in a row, namely by fastest pace since last November,” he emphasized.
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On the other hand, in this sector of the economy, S&P Global showed that only the technology and IT sector recorded a significant expansion in production and demand, whereas the good results at the beginning of the year were seen in consumer services, financial services and business services continued to lose momentum or drag into one contraction back.
In this regard, the company emphasizes that pressure on consumer prices continued to ease in September and input cost inflation fell significantly, despite higher fuel prices during the month.
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“Average prices charged by UK private sector companies also rose more slowly and the inflation rate fell to its lowest level since February 2021, but also remained stubbornly elevated compared to historical standards,” says Williamson.
Furthermore, he added that preliminary PMI data for September was seen by the Bank of England’s Monetary Policy Committee before it decided to “leave interest rates unexpectedly unchanged at 5.25%” at its September meeting, breaking a streak of 14 in a row Interest rate hikes ended.
S&P Global said the weaker demand environment for goods and services was attributed to rising costs of living, higher interest rates and increasing pessimism about the economic outlook.
As a result, these factors have reduced business expectations for next year to their lowest level since December last year.