UK business activity growth slows as new Covid-19 restrictions take effect

Growth in business activity in the UK slowed in September, according to a closely watched survey that indicated a summer economic surge was at risk from new restrictions to curb coronavirus.

The IHS Markit/Cips UK flash, or interim, composite purchasing managers’ index for September fell to 55.7, from a 72-month high of 59.1 in August, as business leaders reported a fall in optimism and consumer confidence. A reading above 50 indicates the majority of respondents, from the services and manufacturing sectors, reported increased month-on-month activity.

Though much improved from the survey-record low of 13.8 in April, and signalling that activity continued to grow, the reading showed faltering optimism after a summer of renewed confidence.

“The UK economy lost some of its bounce in September, as the initial rebound from Covid-19 lockdowns showed signs of fading,” said Chris Williamson, chief business economist at IHS Markit.

Consumer spending rose sharply in July and August as people enjoyed a relaxation of restrictions, and the “eat out to help out” discount scheme encouraged people to buy meals in restaurants and cafés. But a rise in coronavirus cases and the end of the government incentive meant growth slowed again…

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