It seems that Britain's economic recovery from the negative effects of the Corona pandemic was not strong enough to continue during the fourth quarter of the year, as the manufacturing and service sector performance data released by Britain today indicated a loss of momentum in the recovery during the month of October with the resurgence of the Coronavirus pandemic.
The PMI for the services sector in Britain came in at 52.3, less than the expectations that indicated a growth in the sector of 53.4, while the reading for September was revised to a 56.1 from a preliminary of 55.1.
The manufacturing PMI did not witness any improvement, as it came in at 53.3 from a previous reading of 54.1, which was revised from 54.3, while expectations had indicated a reading of 53.2.
The sub-data of the manufacturing index showed that new orders for British companies declined in October for the first time since the recovery began in June.
The data shows that the economic recovery during the month of October is the weakest since the start of the recovery from the shutdown of the economy due to the Corona pandemic, and the weakness is evident in the hospitality and transportation sector due to the decrease in demand and the renewal of the closure procedures due to fears of an increase in the number of Coronavirus infections with the start of the second wave of the pandemic in the Europe.
The British economy contracted by 20% in the second quarter, the largest drop of any advanced economy, and official data showed that an initially rapid recovery has already begun to falter since August.
Finance Minister Rishi Sunak was forced to expand support for companies to cope with payroll payments to employees after he had hoped to lift subsidies from companies.
As of 13:22 GMT, the pound traded lower versus the U.S. dollar at 1.3075, yet the pair is still set for a weekly due to the dollar’s weakness.