Fears for UK economy as services fall into red
BRITAIN'S economy is feared to have plunged back into the red after figures suggested the powerhouse services sector shrank last month for the first time in two years.
The Markit/CIPS purchasing managers' index (PMI) survey showed a reading of 48.9 in December, down from 50.2 in November and below the 50 mark separating growth from contraction.
The result marked the first dip in the services sector since a snow-related decline in December 2010 and comes after disappointing construction figures yesterday.
Experts said the decline for the services sector, which makes up around 75% of total output, gives a clear signal that the economy went back into reverse in the final quarter of 2012.
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Markit economists said the surveys across the services, manufacturing and construction sectors suggest Britain suffered its worst performance in the final three months of 2012 for more than three years, pointing to a 0.2% contraction in GDP.
This would come as a marked reversal of the 0.9% hike in the third quarter.
Service sector firms reported a slide in new work in December amid budget constraints and a lack of confidence, which was the second back-to-back decrease in new work since mid 2009.
Comments
by jabbathebutt
Sunday, January 06 2013, 9:08PM
“MUGS.........”
by jabbathebutt
Sunday, January 06 2013, 9:06PM
“i feel so sorry for britains economy its unreal...”
by josdave
Sunday, January 06 2013, 8:29PM
“It is actually part of the Lisbon treaty that EU member states have to continue trade with a nation if it leaves the EU so why are we staying in this most undemocratic, expensive, inefficient and corrupt organisation?”
by Janey_Socks
Sunday, January 06 2013, 8:04PM
“Why don't you lot join to communist party?”
by mcspredder
Sunday, January 06 2013, 7:38PM
“So if Ireland and the EU are such a big market for us to need to stay joined to this expensive rip-off club, what are we selling to them exactly? And if they really need our products, why would it matter if we were in the same club as them or not? Or are they responsible for purchasing the non-service 25%?”
by josdave
Sunday, January 06 2013, 4:10PM
“When Maggie and her yes men got rid of our manufacturing base she said the services sector ( the financial sector of it) would take up the slack. It's the financial services sector who got us in this mess, not the rest of us who are paying for it, and they don't have a clue how to get us out.”
by paulmh66
Sunday, January 06 2013, 3:57PM
“Of course the service industry is in decline. Not many people working in the UK actually keep their money in the UK. The facts are this, a foreign worker will only spend what they need to live a basic life here, the rest is sent to their families in their home countries. That is a big chunk of UK earnings right there going straight overseas. The British workers will be spending less as their mortgages need to be paid and they are going up along with utility bills so they won't have much spare cash either.”
by pogle63a
Sunday, January 06 2013, 10:32AM
“The service industry makes up 75% of our total output? So in other words unless people continue to shop, stay in hotels, go on holiday, visit the cinema, eat in restaurants our economy will collapse. We now have a service based economy with very little manufacturing or export industry to create jobs and income from overseas to support our wonderfully stupid service industry.
Why doesn`t the Government just say it as it is the country is bust and produces virtually nothing that anyone else wants to buy. Our Country`s assets have been stripped and sold overseas for short term gain of a few, long term misery of others (gas/electricity customers for example). Economy has been badly managed will get worse as the money needed to support a service industry dries up and people stop using it so much.”