Britain’s service sector continued to shed jobs in February, despite eking out a slight growth in output, according to figures on Wednesday.
S&P Global’s UK Services Purchasing Managers Index (PMI) widened from 50.8 to 51.0 between January and February, signalling increasing output levels.
However, the fastest decline in new work was recorded since November 2022 over the month, alongside the steepest pace of job shedding in over four years.
Weak demand was said to be weighing on the sector as input prices also “sharply” increased on the likes of rising payroll costs following last October’s Budget.
“There has been a clear loss of growth momentum since last autumn,” S&P Global Market Intelligence economics director Tim Moore commented.
“Forward-looking indicators continue to suggest an elevated risk of stagflation on the horizon.”
He added business services had been hit by cutbacks in client investment, while consumer service providers grappled with “constrained” discretionary spending.
“Employment has now decreased for five months in a row,” Moore added, “aside from the pandemic, this represents the longest period of falling employment since early-2011”.