Investing.com – Even though activity in the UK service sector accelerated last month, the sector is showing a loss of momentum amid escalating uncertainty over the UK’s departure from the European Union.
Research firm IHS Markit said its services purchasing managers’ index rose to 51.2 in December, compared to forecasts for a reading of 50.7.
That was higher than November’s reading of 50.4.
“The service sector typically plays a major role in driving economic growth, but is now showing worrying signs of having lost steam amid intensifying Brexit anxiety. The final two months of 2018 saw the weakest back-to-back expansions of business activity since late-2012 and highlight how clarity on Brexit is needed urgently in order to prevent the economy sliding into contraction,” IHS Markit chief economist Chris Williamson said in the report.
He noted that the survey, combined with weak activity in construction and manufacturing, pointed to fourth quarter growth of just 0.1%.
“Although increased preparations for a potentially disruptive ‘no deal’ Brexit are helping to boost business activity in some cases, notably in manufacturing, heightened Brexit uncertainty is compounding a broader economic slowdown,” Williamson concluded.