The UK economy is “close to stalling” as business growth has slowed to its lowest level since January, hit by soaring interest rates, a survey by S&P Global Insight has indicated.
Private sector activity in Britain has seen a “considerable slowdown” due to sluggish demand, spiraling inflation, and increasingly high borrowing costs, driving July’s PMI Composite Output Index to its weakest levels in six months, according to data shared on Monday.
This month’s PMI reading was 50.7, down from 52.8 in June and the lowest since January. A reading above 50 shows overall growth.
Chief business economist at S&P Global Market Intelligence, Chris Williamson, warned that when combined with the “gloomy” outlook, the trend reignites recession worries.
“Forward-looking indicators, such as order books inflows, levels of work-in-hand and future business expectations, all point to growth weakening further in the months ahead, adding to a risk of GDP falling in the third quarter,” he predicted.
Surging interest rates and increased cost of living have taken a toll on British households, forcing millions of families to cut spending. Meanwhile, manufacturers have been slashing production in response to a severe downturn in orders from domestic and export markets, the survey showed.
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