The UK services sector was hit hard last month, with the PMI hitting its biggest drop since the country was last locked down as the Omicron variant hit the hospitality and travel sectors.
In particular, the IHS Markit services PMI fell to 53.6 points in December, a 10-month low from 58.5 points in November, according to the final measure, which was slightly stronger than the preliminary one (at 53 , 2 units).
The composite PMI index, which includes the manufacturing PMI, recorded a similar course.
“The massive booking cancellations in response to the Omicron variant have led to a drop in consumer spending on travel, leisure and leisure,” said Tim Moore, an IHS Markit economist.
About 45% of hospitality companies and 50% of personal care companies and hairdressers reported increased cancellations ahead of Christmas, according to separate data released by the National Statistics Office on Thursday.
The last time the PMI of services was even lower was in February 2020, when the economy was in lockdown mode and restaurants and non-core stores were closed to the public.
December figures were above the 50-point mark that usually separates growth from shrinkage, but economists said the magnitude of the index’s rise raises the chances that official figures to be released next month show that the economy has shrunk in December.
Pantheon Economics forecasts a 0.6% drop in UK GDP in December and a 0.3% drop in January.
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Source From: Capital
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