Britain's economic recovery is “losing its legs” according to the latest snapshot of the dominant services sector.
The Markit/CIPS Purchasing Managers’ Index declined to 58.7 in September, down from 60.5 in August and below City analysts’ expectations.
Activity is still above the 50 mark that signals growth, but economists said there were clear signs of a slowdown.
“September’s PMI surveys suggest that the UK most likely enjoyed another spell of above-trend economic growth in the third quarter, but the recovery appears to be losing its legs,” said Markit’s Chris Williamson.
He added that the full range of PMI surveys — which include manufacturing and construction — are now signalling a slight decline in growth from the 0.9 per cent GDP growth reported for the second quarter.
A fifth of the respondents to the services survey recorded a rise in their payroll numbers, suggesting that employment is continuing to rise.
There was also the sharpest increase in the inflation rate for four months for services firms, which account for around three quarters of national output.
There was also disappointing news from eurozone services activity surveys today with the relevant PMI index for the single-currency bloc declining to a six-month low of 52.4 in September, down from 53.1 in August.
The index in France fell to 48.4 signalling a contraction in the month. In Italy, which is in recession again, it dipped further into negative territory with a reading of 48.8.Reuse content