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August saw activity in the services sector slump across the UK, as the headline index figure slipped to 51.1, only just above the figure of 50 which indicates growth in a sector.
This figure was 4.3 points below July’s figure, a fall not seen since the beginning of the recession when financial services firm Lehman Brothers collapsed.
The services sector covers a wide range of industries, including computing and IT, hotels and restaurants and business services, and makes up over three-quarters of the UK’s GDP.
Economists have said that solid growth in July and the impact of the public disorder seen at the start of August can only partly explain the poor figures, and that the economy as a whole is showing unquestionable weaknesses and huge instability.
Business confidence across the board has dissipated in recent weeks as various sectors have reported poor summers. New levels of business for all sectors was also said to be on the decline as belt-tightening is being seen on an almost worldwide level.
But optimism was reported, albeit consigned mainly to the south east, in the wake of the 2012 Olympics, when many businesses will look to capitalise on the vastly increased numbers of tourists in the UK.
If inflation also eases off by the end of the year, maybe the UK’s economy will get a few welcome boosts in the right direction.