Increased fears that the UK economy may soon fall into recession were stoked yesterday by a key survey of the dominant service sector, which plunged to its worst reading since the aftermath of 9/11. The Chartered Institute of Purchasing and Supply/Markit's (CIPS) monthly snapshot of the sector, which accounts for three-quarters of the economy, showed a drop in the main purchasing managers' index (PMI) to 47.1. This is some way below what City analysts had expected and is the lowest reading since October 2001. A number below 50 denotes contraction. Until recently, the index had spent several years well above 50. Paul Smith, a senior economist at Markit Economics, said: "The services report confirms the broad-based deterioration in UK economic activity, with the composite PMI heading towards unprecedented recession territory....
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