The British economy has finally crawled out of recession but the recovery looks set to be slow at best, experts warned last night.
The Markit/CIPS index of activity in the powerhouse services sector – where anything above 50 represents growth – fell from 53.7 in August to 52.2 in September.
It followed muted surveys on construction and manufacturing this week and suggested that the economy remained weak.
Martin Beck, an economist at Capital Economics, said: ‘Overall, it is looking like the rebound in the economy expected in the third quarter is struggling to get any “oomph” behind it.’
Business Secretary Vince Cable admitted the economy was still in crisis. ‘Projecting and predicting how we get out of this crisis is very difficult indeed,’ he said.
But in Europe the picture remains far from rosy. Purchasing managers’ indexes suggested the aggressive actions taken by the world’s central banks have yet to convince investors the global crisis has now passed.
Eurozone companies reported falling new orders and more job cuts, according to the PMI data, while in China the normally robust services sector weakened to a near two-year low last month.
America provided a brighter spot, with the huge services sector registering a bigger-than-expected rise thanks to new orders, according to the Institute for Supply Management.
The ADP National Employment Report showed private firms added 162,000 jobs in September – ahead of economists’ expectations but fewer than the 189,000 hired in August.