Weakest rise in UK private sector output for six months 'reignites recession worries'

investmentweek.co.uk:

The degree of positive sentiment regarding growth prospects among businesses for the year ahead is now the weakest since December 2022.

The considerable slowdown in business activity growth across the UK private sector economy was largely due to flatlining new orders and sharply reduced backlogs of work, according to the S&P Global and CIPS Flash UK Composite Output Index.

Survey respondents often commented on a headwind to business activity from rising interest rates, elevated inflation and greater caution among clients due to the uncertain economic outlook.

Figures compiled for the seasonally adjusted index registered a measure of 50.7 in July. This was down from 52.8 in June and marks the lowest reading since January. 

The index has posted above the crucial 50.0 no-change threshold in each of the past six months, although the latest expansion was only marginal and the weakest over this period. 

The degree of positive sentiment regarding growth prospects among businesses for the year ahead is now the weakest since December 2022.

Inflation comes in under expectations at 7.9% but UK remains 'drastic outlier'

This mostly reflected a downturn in business optimism across the service economy to its lowest so far this year. Survey respondents widely noted concerns about the impact of higher borrowing costs on customer demand.

Commenting on the flash PMI data, Chris Williamson, chief business economist at S&P Global Market Intelligence, said: «The UK economy has come close to stalling in July, which, combined with gloomy forward-looking indicators, reignites recession worries.»

Manufacturing production fell for the fifth successive month and at the steepest pace since December 2022. Goods producers mostly noted that lower