UK services sector uplift slows as higher interest rates take toll on demand

For free real time breaking news alerts sent straight to your inbox sign up to our breaking news emails Sign up to our free breaking news emails Sign up to our free breaking news emails SIGN UP I would like to be emailed about offers, events and updates from The Independent. With the UK economy still a hair’s breadth away from recession, companies will be making modest plans for future business this year rather than for the highs experienced in the last few months Dr John Glen, chief economist at CIPS But service providers still faced cost pressures among the strongest since the survey began nearly 27 years ago, with higher staff wages offsetting falling electricity and fuel bills. Dr John Glen, chief economist at the Chartered Institute of Procurement and Supply, said: “Though the sector remained in expansion mode, customer appetite to spend had decreased with concerns over interest rates and cost of living rises affecting household budgets. “With the UK economy still a hair’s breadth away from recession, companies will be making modest plans for future business this year rather than for the highs experienced in the last few months.” The Monetary Policy Committee will need to see price rises slow over a period of at least a few months before it is willing to call time on its hiking cycle Samuel Tombs, chief UK economist at Pantheon Macroeconomics Samuel Tombs, chief UK economist for Pantheon Macroeconomics, said that while price rises appear to be slowing, it is not quick enough to avert further interest rate hikes. “The Monetary Policy Committee will need to see price rises slow over a period of at least a few months before it is willing to call time on its hiking cycle”, Mr Tombs said.