The business activity in the UK service sector slowed down in November, shrinking from the six-month high reached earlier. The Purchasing Managers’ Index (PMI) of private Markit recorded a drop of 55.6 points in October to 53.8 points in the number. The index was expected to drop to 55 points.
Although the British economy is likely to expand by 0.5% in the fourth quarter, driven by more expensive oil and depreciation of the pound. The service companies say they are shifting higher spending on food, fuel, imports and wages to their customers.
“The data show that inflationary pressure is yet to reach its peak”, said the chief economist at Markit, Chris Williamson. “Uncertainty over the economic outlook, mostly related to the concerns surrounding Brexit, continues to affect business moods in November”, added he.
The British Central Bank (BoJ) last month raised interest rates for the first time in a decade. However, as the expansion is fragile, the regulator says further tightening of monetary policy would be limited and smooth.