Economic growth weaker due to slow rise in new orders

THE UK economy grew at its slowest pace for three months as companies saw a marked slowdown in business in the first half of April, according to new data.

The closely-followed S&P Global/ CIPS purchasing managers’ index (PMI) flash score for the first two weeks of the month hit 57.6, down from 60.9 in March. Anything above 50 is seen as an economy in growth.

Respondents to the survey said the UK’s economic recovery from Covid19

was much weaker due to the slowest rise in new orders from businesses so far this year.

They said clients were holding off on making deals due to the cost-ofliving crisis and economic uncertainty caused by the Ukraine war.

The services sector, which includes retail, hospitality and leisure, saw the biggest slowdown, with the business activity index at 58.3 versus 62.6.

Bosses put this down to rising costs as inflation hit and momentum since the easing of Covid-19 restrictions cooled.

Manufacturing remained steady, recording a score of 55.3 versus 55.2 in March, with companies reporting that supply chain problems were easing.

But overall new order levels were a problem, with manufacturers and service sector firms saying consumer demand fell due to squeezed household finances.

Business-to-business sales also faltered due to higher operating expenses, rising inflation and geopolitical uncertainty.

Inflation has proved particularly difficult, with input prices in manufacturing at their highest in 30 years.

Around 84% of all manufacturing firms reported an increase in their costs since March, along with 66% of all service providers.

Higher transport and utility bills, along with increased wages, were flagged.