UK edges towards recession as service sector sinks

Surprise contraction comes amid sliding sales, higher costs, job losses and disruptive Brexit

Britain has edged closer to its first recession since the financial crisis after the country's dominant service sector unexpectedly plunged into contraction last month, in a sign of the mounting stress facing the economy as Brexit looms.

According to IHS Markit and the Chartered Institute of Procurement and Supply (Cips), activity in the sector fell as companies reported sliding sales, job losses, cancelled and postponed projects and weak investment levels.

One of the two main definitions of recession in the UK is at least two quarters of negative economic growth. Judged by this yardstick, the UK was last in recession in 2008-09, when there were six consecutive quarters of negative growth.