Brexit causes UK services sector to fall

boris-parachuteThe UK services sector contracted for the first time in three and a half years thanks to Brexit.

The PMI (Purchasing Managers’ Index) survey data from IHS Markit and CIPS shows that the output and new business both declined and at the fastest rates since early 2009, with the Business Activity Index falling from 47.4 in July, compared with 52.3 in June.

It meant employment in the services sector stayed the same, marking the end of a 3.5-year period of uninterrupted job creation.

The volume of incoming new business dropped for the first time since the end of 2012. The report said that this was the fastest decline since early 2009 and again fuelled by uncertainty over the EU vote.

Chris Williams, chief economist at Markit, said: “It is too early to say if the surveys will remain in such weak territory in the coming months, leaving substantial uncertainty over the extent of any potential downturn. However, the unprecedented month-on-month drop in the all-sector index has undoubtedly increased the chances of the UK sliding into at least a mild recession.

“Service providers are certainly bracing themselves for worse to come with a record drop in business confidence about the year ahead, leaving optimism at its lowest ebb since February 2009.”

Still at least Brexit means we will no longer having foreigners telling us how to run things, even if they appear to have been doing it better than us.