Brexit & global economic concerns cause UK economy to stall

UK’s service sector stagnated in January according to the IHS Markit/CIPS purchasing managers’ index.

The figures showed a reading of 50.1 in January, lower than December’s 51.2.

The pound fell 0.17 per cent to $1.3017 following the disappointing data.

Britain’s didn’t fall into a recession after the 2016 referendum vote  However, growth slowed sharply in late 2018 as the Brexit deadline approached with no agreement, on how to leave the European project, set in place.

IHS Markit’s Chris Williamson said: “Growth ground almost to a halt in January, matching similar disappointing news in the manufacturing and construction sectors.

“The last three months have seen the economy slip into its weakest growth spell for six years and indicate that GDP likely stagnated at the start of 2019 after eking out modest growth of just 0.1% in the fourth quarter.

“The survey results indicate that companies are becoming increasingly risk averse and eager to reduce overheads in the face of weakened customer demand and rising political uncertainty.

“Such worries were in turn most commonly linked to heightened Brexit anxiety, though wider global political and economic factors were also seen to have been taking their toll on demand.”

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