Economy stagnates as services firms' growth slows down
Thursday 04 October 2012
The British economy is virtually stagnant as the latest growth crunch for services firms heralds a fresh rise in unemployment, a survey warned yesterday.
Services firms, ranging from hotels and restaurants to IT and accounting, saw easing growth during September and also cut staff for the first time since November last year, according to the Chartered Institute of Purchasing & Supply.
The latest worrying signs follow outright contraction of manufacturers and builders, raising the chances that the Bank of England will be forced to cut growth forecasts and return to the printing presses with more quantitative easing next month.
Survey compiler Markit said its data were consistent with growth of just 0.1 per cent between July and September, although official figures will be much stronger when a bounceback from Jubilee celebrations is factored in.
Chris Williamson, chief economist, said the economy "barely expanded" in the third quarter, and added: "Employment has also suffered in response to the slowdown, with September seeing one of the steepest cuts to service-sector staffing since 2009. With the mini-boom in the labour market having now come to an end, it seems inevitable that unemployment will start to rise again."
The snapshot of a sector which accounts for three-quarters of the UK's economic output came as more gloom emerged from the beleaguered eurozone, where services firms are suffering the sharpest slowdown since July 2009.
France and Spain were particularly hard hit during the month as the single-currency bloc heads for a virtually certain double-dip recession.
China's services firms also endured the slowest growth for nearly two years last month.
- 1 What happens to your body when you give up sugar?
- 2 Japanese island overrun with cats after population explodes
- 3 Delhi bus rapist blames dead victim for attack because 'girls are responsible for rape'
- 4 Have sex with your iPad thanks to the new sex toy no-one asked for
- 5 Average penis size revealed: Scientists attempt to find what is 'normal' to reassure concerned men
California teacher appears to have hanged herself in her classroom
The City of the Monkey God: Archaeologists claim to have found city lost for 1,000 years in remote Honduran jungle
Japanese island overrun with cats after population explodes
Delhi bus rapist blames dead victim for attack because 'girls are responsible for rape'
Bubonic plague-carrying fleas found on New York City rats
'Jihadi John': CAGE representative storms off Sky News accusing Kay Burley of Islamophobia
Durham Free School: 'Creationism taught at' free school facing closure
Nearly 100,000 of Britain's poorest children go hungry after parents' benefits are cut
Ukip would cut billions from Scottish budget to fund English tax cuts
End of the licence fee: BBC to back radical overhaul of how it is funded
Ukraine crisis: Top Chinese diplomat backs Putin and says West should 'abandon zero-sum mentality'
iJobs Money & Business
£36,000 - £40,000: Christine McCleave: Are you looking for a new opportunity a...
£15000 - £18000 per annum: Recruitment Genius: This is a great opportunity for...
£50000 - £60000 per annum + Excellent Salary: Austen Lloyd: An outstanding new...
£20000 - £21000 per annum + uncapped commission: SThree: As a graduate you are...