The UK’s services sector was “close to stalling” in November as it slowed to its lowest rate in more than a year as businesses are realising the impact of business tax increases in Labour’s Budget.
In November the S&P Global UK services PMI survey scored 50.8 compared to 52.0 in October, this was above the economists forecast of a 50.0 reading.
The Chancellor Rachel Reeves announced during her Autumn Budget on 30 October there will be a rise in the minimum wage and a rise in employer’s national insurance contributions which will cripple many businesses.
Tim Moore, economics director at S&P Global Market Intelligence, said, “UK service providers indicated that business activity was close to stalling in November, with growth easing to its slowest for over a year.
“Weaker sales pipelines, cutbacks to new projects and more caution among clients were all cited as having an adverse impact on service sector output.”
He added: “Worries about the impact of policies announced in the autumn Budget, in particular those pushing up employment costs, were widely reported as leading to a gloomier assessment of business investment prospects and the broader UK economic outlook.”
The Bank of England closely watches the services sector and it is widely expected policymakers will keep interest rates unchanged at 4.75%.
