Belfast Telegraph

UK services sector contracts at fastest pace for six months

The UK's powerhouse services sector contracted at its fastest pace for six months in October, official figures have shown.

Services output, which accounts for about three quarters of the economy, fell by 0.4% in October, the first fall since July and the sharpest since April, the Office for National Statistics (ONS) said.

Within the sector, the Government and other services category accounted for half the drop, reflecting the start of what is expected to be a prolonged austerity campaign.

Chancellor George Osborne announced his £81bn package of spending cuts in mid-October, which included hundreds of thousands of public sector job losses.

Howard Archer, chief UK and European economist at IHS Global Insight, said the figures were worrying for the overall economic performance in the UK at the start of the fourth and final quarter of the year.

But he added: "It needs to be borne in mind that the services data tends to be highly volatile from month to month and subject to major revisions."

Mr Archer added: "However, it is clear that the services sector is already being affected to a limited degree by the cutbacks in government spending."

Hotels and restaurants and transport, storage and communication all saw declines in October.

Popular

From Belfast Telegraph