While the political situation understandably took centre stage yesterday, there was the little matter of the Markit services PMI reading for November on the economic data schedule. Rather alarmingly, the figure dropped to just 50.4 last month – the weakest reading since just after the EU referendum in 2016. It is worth bearing in mind that services make up approximately 80% if the UK’s economic output, so it is a major blow.
Companies in the service sector have reported that business activity and new work expanded at the weakest levels for almost two-and-a-half years. In addition, several businesses said that increased uncertainty surrounding Brexit has led to clients making business investment decisions, which should serve to highlight how important certainty is to the economy.
We also saw UK car sales, which fell by 3% in November as stalling consumer confidence, supply delays and model replacements continue to weigh heavily on the market. A total of 158,639 vehicles were registered last month, almost 5,000 fewer than the same month last year.