Survey Suggests UK Recession Continues
04 July 2012 16:30 - Florence Fullalove

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Survey Suggests UK Recession Continues

The Markit/CIPS Purchasing Managers Index (PMI) is used to help economists determine how well the manufacturing, construction and services sectors are performing. Markit’s closely watched survey calculates that the UK economy contracted by 0.1% in the second quarter of this year. Even though this is an improvement on the 0.3% negative growth figure seen in the first quarter of 2012, it would represent three consecutive quarters of contraction for UK gross domestic product.  The data released today is monitored by the Bank of England and makes it even more likely the Monetary Policy Committee will look to boost money supply in the economy further through its programme of quantitative easing later in the week.

The PMI data for the services sector, which represents nearly 75% of the economy, indicated that activity was at an 8 month low. Chris Williamson, chief economist at Markit said, “The services economy saw one of its worst months since the recovery began three years ago, with the June survey showing signs of stalling.” He added, “The services PMI probably cements the case for further stimulus from the Bank of England.”

Markit said that construction activity fell at its fastest rate in two and a half years last month while manufacturing contracted for the second month running. The figures have left many struggling to see a brighter future for the UK.