UK economy starts fourth quarter on weak note as Brexit hits orders

LONDON (Reuters) – Britain’s economy got off to a weak start to the final quarter of 2019, according to surveys which showed the giant services sector stagnated last month, with concerns about Brexit depressing new orders, while consumers stayed cautious.

Britain had been due to leave the European Union on Oct. 31 which prompted limited stockpiling by businesses and households.

But Brexit has now been delayed until Jan. 31, with an election on Dec. 12 raising further uncertainty.

The IHS Markit services Purchasing Managers’ Index (PMI) edged up to 50.0 — which represents zero growth — from 49.5 in September, which was one of the lowest readings since Britain was last in recession in 2009.

The all-sector PMI, covering manufacturing and construction as well as services, remained below 50 for a third month in a row, the first time this has happened since 2009.

“The underlying business trend remains one of stagnation at best,” IHS Markit economist Chris Williamson said.

October’s PMI readings on their own were consistent with a 0.1% quarterly fall in overall economic output, Markit said.

Britain’s economy has lost momentum this year, hurt by a global downturn due to the U.S.-China trade war as well as increased Brexit uncertainty.

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