LONDON Reuters -- British businesses last month suffered the biggest contraction in activity since early last year, although the downturn was a little less severe than originally estimated, a survey showed on Wednesday.
The final version of the S&P Global UK Composite Purchasing Managers' Index fell to 49.1 in September from 49.6 in August, the lowest reading since January 2021 when much of the country was still in a COVID 19 lockdown.
A reading below 50 means a contraction in activity.
Services companies that comprise the largest portion of the private sector economy were least positive about the outlook since May 2020, early in the epidemic, as the reading was an improvement on a preliminary flash reading of 48.4.
The survey chimed with other indicators that indicate Britain's economy is flirting with a recession.
Service sector businesses trimmed their growth expectations to the lowest for nearly two and a half years in September, which survey respondents linked to concerns about falling disposable income and the unfavourable global economic outlook, said Tim Moore, economics director at S&P Global Market Intelligence.
The PMI for the services sector fell to 50.0 from 50.9 in August, signifying stagnation but still better than the flash reading of 49.2.
In September, new orders from both home and abroad declined, with survey respondents blaming Brexit and a weaker world economy, as well as subdued confidence and customers cutting costs.
The inflation pressure remained close to the record high in May, as businesses reported unavoidable price increases due to higher bills for wages, energy and supplies.