LONDON: Britain’s economy is showing signs of stalling as high inflation hits new orders and businesses report levels of concern that normally herald a recession, a closely watched industry survey showed on Thursday.
S&P Global’s Purchasing Managers’ Index (PMI), covering services and manufacturing firms, also showed companies raising pay and passing higher costs on to clients, a worry for the Bank of England.
The PMI’s preliminary composite index held at 53.1 in June, above the median forecast of 52.6 in a Reuters poll of economists and unchanged from May.
But its measure of new orders fell to 50.8, the lowest in over a year. Factory orders dipped below the 50.0 growth threshold to 49.6.
“The economy is starting to look like it is running on empty,” Chris Williamson, chief business economist at S&P Global Market Intelligence, said. “Business confidence has now slumped to a level which has in the past typically signalled an imminent recession,” he said, adding that the economy was likely to show a fall in output in the second quarter that could deepen in the third quarter.
Published in Dawn, June 24th, 2022