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Services sector growth falls due to concerns over Brexit

By Ben Woods

The UK's powerhouse services sector slipped back last month as Brexit uncertainty intensified in the weeks leading up to the referendum on the European Union.

Business activity in the services sector matched a 38-month low last seen in April as mounting uncertainty surrounding the EU referendum "weighed on workloads and incoming new business".

The responses were collected between June 13 and 28, with 89% coming in before the referendum result on June 24.

The services sector accounts for around 78% of the UK economy. The PMI surveys indicate that the pace of UK economic growth slowed to just 0.2% in the second quarter, with a further loss of momentum in June as Brexit anxiety intensified.

Chris Williamson, chief economist at Markit, said the string of economic surveys for June pointed to a slowdown in the UK economy.

"Hiring has also clearly been hit, as firms lack clarity on the economic outlook.

"Business optimism in the vast service sector is down to a three-and-a-half-year low.

"A further slowing, and possible contraction, looks highly likely in coming months as a result of the uncertainty created by the EU referendum."

Belfast Telegraph