British private-sector economic activity fell at its fastest rate in two years in January, a survey showed on Tuesday, as businesses blamed higher Bank of England interest rates, strikes and weak consumer demand for the slowdown.
The S&P Global/CIPS flash composite Purchasing Managers' Index dropped to 47.8 from 49.0 in December, at the bottom end of economists' forecasts in a Reuters poll and the lowest since January 2021. Readings below 50 indicate falling output."Weaker-than-expected PMI numbers in January underscore the risk of the UK slipping into recession," S&P Global's Chief Business Economist, Chris Williamson, said.
However, a widely expected fall in output this year will weigh on the BoE's Monetary Policy Committee as it considers how much further to raise interest rates on Feb. 2. Finance minister Jeremy Hunt is under pressure to announce pro-growth measures in a March 15 budget statement but data published earlier on Tuesday showed anEconomists said Britain's economy was losing momentum while its peers in the European Union seemed to be gathering pace.
Tuesday's PMI data showed that prices charged by businesses rose at the slowest rate since August 2021, although the increase was still steep by historic standards.
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