Latest PMI shows UK economy fell into contraction in August The monthly business survey from S&P Global and the Chartered Institute of Procurement and Supply (Cips) has revealed a “severe and accelerated” decline in manufacturing output in August, alongside weaker activity in the UK’s dominant service sector. The index fell from a revised reading of 50.9 in July to 49.6 in August, indicating a contraction in output. It marks the first drop below the all-important 50 no-change mark in 18 months. Chris Williamson, S&P Global chief business economist, said: “Demand for consumer-facing services such as restaurants, hotels, travel and other recreational activities is collapsing under the weight of the cost-of-living crisis, with demand for business services also coming under pressure amid concerns over rising costs and the darkening economic outlook.” He added: “The incoming Prime Minister will be dealing with an economy that is facing a heightened risk of recession.”