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This development raises concerns about the impact of the Bank of England’s recent rate hikes, which appear to be gradually slowing down the economy and potentially pushing the country towards a recession.
On the other hand, the dominant service sector continued to grow, albeit at a slower pace, with a reading of 51.5.
These indicators, coupled with pessimistic forward-looking signs, have reignited worries about the possibility of a recession.
The growing concern was no longer if the UK economy would enter a recession but rather how long such a recession would last.
However, the pound, which had been trading above $1.30 the previous week, fell to $1.2814.
Webb concluded that the Bank of England would probably need to maintain high interest rates until the second half of the following year to achieve its 2% inflation target.