Growth of UK’s Covid-hit service economy plunges

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The UK saw the weakest business activity growth in December 2021 since February of the same year as the Omicron Covid-19 variant led to a steep fall in spending on face-to-face consumer services, escalating business uncertainty and disruptions due to staff absences, a report said.

In December, the headline seasonally adjusted IHS Markit/CIPS UK Services PMI Business Activity Index decreased sharply from 58.5 in November to 53.6, the lowest since the rebound from lockdown measures began last spring, according to the joint report by IHS Markit, a London-based global information provider, and CIPS, a British-based global procurement and supply organization.

Nonetheless, the latest reading was still above the neutral 50.0 threshold, meaning an overall increase compared to the previous month, reports Xinhua news agency.

Among the positive aspects, job creation remained relatively strong, cost pressures eased from November’s peak, and output growth expectations improved slightly, the report said.

Around 55 per cent of the survey panel anticipated a rise in activity over the course of 2022, while only 10 per cent forecast a decline, it noted.

“The degree of optimism has held steady since the autumn, suggesting that most businesses are forecasting only a temporary hit to demand from the Omicron variant,” said Economics Director at IHS Markit Tim Moore.

The UK reported 179,756 coronavirus cases in the latest 24-hour period, bringing the total infection tally to 14,100,303, according to official figures released Thursday.

The country also reported an additional 231 fatalities, taking the death toll to 149,993.

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