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UK business activity reports strongest downturn since 1998

UK business activity reports strongest downturn since 1998

IHS Markit data released on Tuesday showed that U.K. business activity recorded its sharpest downturn since 1998 in April, as measures to slow the spread of the new coronavirus severely deteriorated the economy.

The Composite PMI for April confirmed a widening contraction to 13.8, compared to forecasts of 12.9, falling further from March’s reading of 36.0.

IHS Markit said the decline in private sector activities in April was the largest since January 1998, when it was first surveyed.

Yet, the services sector was more affected due to shutdowns and household spending on necessary things only., where the Services PMI gauge slipped to 13.4 from 34.5 in March.

“The April survey reading is consistent with the economy falling at a quarterly rate of approximately 7%, but we expect the actual decline in GDP could be even greater,” said Tim Moore, economics director at IHS Markit.

As of 09:30 GMT, the GBP/USD pair traded slightly up at 1.2447, following its drop over the previous two sessions as the US-China tensions boosted haven demand. 

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