By Aysu Bicer
LONDON (AA) - The risk of a recession in the UK has risen as business activity is shrinking at the fastest rate since the global financial crisis of 2008, when months hit by COVID-19 lockdowns are excluded, according to a new survey by S&P Global on Friday.
The flash estimates for September paint a grim picture of the UK's economic landscape, with a steeper downturn in the service sector casting a long shadow over the nation's financial health.
Overall business activity plummeted to a 32-month low.
Commenting on the flash PMI data, Chris Williamson, chief business economist at S&P Global Market Intelligence, said: "The disappointing PMI survey results for September mean a recession is looking increasingly likely in the UK."
"The steep fall in output signalled by the flash PMI data is consistent with GDP contracting at a quarterly rate of over 0.4%, with a broad-based downturn gathering momentum to hint at few hopes of any imminent improvement," he said.
Williamson elaborated on these concerns, saying: "Despite higher fuel prices during the month, firms' costs grew at a sharply reduced rate overall which, combined with collapsing pricing power amid weak demand, looks set to take further pressure off inflation in the coming months."
Survey participants pointed to reduced demand caused by rising living expenses and increased interest rates.
They also mentioned decreased spending by clients in the real estate and construction industries. Additionally, some manufacturers indicated that customer destocking had negatively impacted their production needs.