Service Sector Contraction

The United Kingdom's service sector witnessed a notable deceleration in April, with the services PMI dropping to 49.0 from 52.5 in March, as reported by S&P Global. This marks the sector's first contraction in eighteen months, driven by a decline in new business and employment, reaching its lowest point since January 2023.

Composite PMI Decline

The composite Purchasing Managers' Index (PMI) also experienced a downturn, falling from 51.5 in March to 48.5 in April, indicating broader economic challenges.

Expert Insights

"The UK service sector's output has contracted for the first time in one-and-a-half years, with heightened business uncertainty significantly impacting order books in April. Export conditions were particularly dismal, with foreign new business declining at the fastest rate since February 2021," noted Tim Moore, Economics Director at S&P Global Market Intelligence.

Moore further elaborated, "Service sector companies are preparing for a prolonged period of global economic instability and increased recession risks, leading to a sharp decline in business expectations for the upcoming year."