The UKâs economic recovery was under further strain this morning after a UK purchasing managersâ survey fell more than expected in August. The British service sector activity grew at its slowest pace since April 2009, with a decline in hiring as employers worried about an economic slowdown and public spending cuts.
The pound fell around half a cent against the dollar after the index dropped to 51.3 in August, from Julyâs 53.1. A reading over 50.0 suggests growth in the economy. This was a much sharper fall than the 52.9 forecast by economists. The pound fell to $1.5400, from $1.5423 before the release. The euro rose to 83.28 pence from 83.00 before the report.
Mark Bolsom, Head of the UK Trading Desk at Travelex Global Business Payments commented, âWhilst we are still growing, UK data is turning softer and the pace of growth is weakening. I donât think this data is a blip as we have seen consistently weak growth from the U.S. and it looks to be feeding into our numbers.
âConcern remains extremely high amongst businesses that the global economic slowdown will impact on their growth and development, and unfortunately data such as this adds to the mounting fears that growth will be weak going forward.â