Private sector growth stalled over the last month, according to a closely watched survey, raising fears that the economy is edging closer to recession.
Rising employment costs from Rachel Reeves’s decision to increase business taxes in her first budget, along with soft consumer demand, have led UK companies to cut workers at the fastest rate since the global financial crisis in 2009, excluding the pandemic.
The latest flash composite purchasing managers’ index (PMI) from S&P Global was unchanged in December at 50.5, below expectations and just above the 50-point threshold that indicates stagnation.
Economists at Capital Economics said the survey was consistent with a “0.3 per cent quarter-on-quarter contraction in the fourth quarter”, which would raise the threat of recession at the beginning of next