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London - UK services growth faltered in September, highlighting the breadth of the fallout from weakness in the global economy.
An index of activity fell to 53.3, the lowest since April 2013, from 55.6 in August, Markit Economics said on Monday. That compares with an expectation for an increase to 56, according to a Bloomberg survey of economists.
The damage from China’s slump and the slowdown in emerging markets is expanding beyond manufacturing, and Markit’s composite data that includes factories and construction suggest economic growth slowed to 0.5% in the third quarter.
The reports bolster the case for Bank of England officials to hold their key interest rate at a record low this week.
“The economy sank further into a soft patch at the end of the third quarter,” said Chris Williamson, chief economist at Markit. “Weakness is spreading from the struggling manufacturing sector, hitting transport and other industrial- related services in particular.”
Services had the slowest growth in new business for more than two years in September. Some firms were hesitant to place new contracts because of global economic uncertainty, Markit said.
The broader index nevertheless held above 50, the dividing line between expansion and contraction. Employment rose at the strongest level in three months, and the environment for hiring signals the slowdown has potential to be short-lived, according to the report.
