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Suggesting that the period of relatively robust economic growth over the hot summer months has begun to cool, the latest surveys of business activity for October revealed a marked slowdown in the fourth quarter of 2018.
The UK’s services sector, the largest contributor to economic growth, which includes hotels, restaurants, transport and finance, expanded at the slowest pace since March according to the latest snapshot report published on Monday from IHS Markit and the Chartered Institute of Procurement and Supply (Cips).
It said Brexit-related uncertainty and concerns about the global economic outlook had constrained growth, while it also recorded the weakest upturn in services firms taking on new work since straight after the EU referendum in 2016.
The monthly IHS Markit/Cips purchasing managers’ index, which is closely watched by the Bank of England and the Treasury, dropped to 52.2 last month from 53.9 in September, its weakest for seven months on a scale where a reading above 50 signals economic growth.
Economists forecast that GDP growth will slow to 0.2% in the final quarter of the year from about 0.6% in the third quarter, handing Theresa May disappointing news as she attempts to negotiate a withdrawal agreement from the EU. [...]
Duncan Brock, group director at Cips, said: “Many of the respondents attributed this poor performance and the biggest softening in new order growth since July 2016 to continuing ambiguity around the Brexit negotiations.” [...]