UK services sector growth slows

The UK's recent boost is under threat

Growth in the UK services sector slowed in February as the coronavirus spread, according to the IHS Markit/Cips purchasing managers’ index.

The pair said that the sector also saw a boost following the General Election in December and an increase in domestic demand after the exit from the EU.

The PMI came in at 53.2 in February, down from 53.9 in January. A score of above 50 indicates expansion.

Chris Williamson, chief business economist, IHS Markit, said: "The outbreak was linked to reduced tourism numbers and lower travel and transport business volumes, but was also seen as having a wider hit demand via reduced confidence and financial market volatility, as well as supply shortages limiting the ability to fulfil orders.

"Uncertainty regarding the UK's trading relationship with the EU also lurks in the background as a risk to exports."

Duncan Brock, group director, the Chartered Institute of Procurement & Supply, said new orders in the UK services sector in February “were largely driven by domestic sales, as some EU clients continued to sidestep business with the UK because of lingering Brexit concerns”.

He said the virus “also affected orders from the Asia region, putting a dampener on new business and subsequently levels of job creation”.