British economy is faltering, price pressures are still high

A survey revealed that signs of a slowdown appeared in the British economy this month, and that inflation pressures remained high

According to Reuters, the survey was published a day after the Bank of England raised interest rates sharply and said it was ready to do more to curb inflation.

An initial reading on Friday showed that the Standard & Poor’s Global Composite Purchasing Managers’ Index, which covers businesses in the service and manufacturing sectors, fell to a three-month low of 52.8 in June, down from 54 in May, hit by new orders. The weakest growth since January, in light of the difficulties faced by factories, in terms of conditions.

Chris Williamson, chief business economist at Standard & Poor’s Intelligence, said the survey indicates that the economy has lost momentum after a brief growth spurt in the spring and appears set to weaken further in the coming months.

“It is noticeable that consumer spending on services, which was the main driver of growth in the spring, is now showing signs of faltering,” he added. He attributed the reason for this to high interest rates, inflation and concerns about the economic outlook

The preliminary reading of the survey showed that the British services sector grew at the slowest pace in three months, and the manufacturing sector contracted at the most pace in six months.

On Thursday, the Bank of England raised interest rates for the thirteenth time in a row, to five percent, a sharp increase from 0.1 percent at the end of 2021.

The Bank of England is expected to continue raising borrowing costs in an effort to tackle inflation, which hit 8.7 percent in May.