Services sector activity hits lowest level since Brexit vote

Activity in Britain's services sector sunk to it lowest level since the Brexit vote as bad weather and economic uncertainty took their toll.

The closely watched Markit/CIPS services purchasing managers' index (PMI) showed a reading of 51.7 in March, down from 54.5 in February and missing economists' expectations of 54.0.

A reading above 50 indicates growth.

It is the weakest service sector performance since July 2016, according to the survey.

Businesses were disrupted by unusually bad weather that included snow last month, which contributed to subdued consumer spending.

"Heightened economic uncertainty" also affected the service sector, acting as a "brake on growth", the report said.

It marks further bad news for the UK economy after separate PMI data earlier this week showed a contraction in the construction sector and only a marginal month-on-month improvement in manufacturing.

Chris Williamson, chief business economist at IHS Markit, which compiles the survey, said: "The UK economy iced up in March, suffering the weakest increase in business activity since the Brexit vote amid widespread disruptions caused by some of the heaviest snowfall in years.

"As a result, first-quarter economic growth will likely have been adversely affected.

"The PMI surveys collectively signal a quarterly GDP growth rate of just under 0.3%, down from 0.4% in the fourth quarter, albeit with the rate of growth sliding to just 0.15% in March alone."

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