Newspaper article The Evening Standard (London, England)

Services Grind to Halt as War Tension Grows

Newspaper article The Evening Standard (London, England)

Services Grind to Halt as War Tension Grows

Article excerpt

Byline: JANE PADGHAM

THE deteriorating economic outlook and mounting tension over war with Iraq has hit Britain's services sector, which virtually ground to a halt last month.

The latest CIPS/Reuters snapshot of the sector - which accounts for about 70% of output - revealed that due to the first fall in new business for 15 months, business activity grew at its slowest for more than a year.

Economists said the news shortened the odds on an interest rate cut from the Bank of England tomorrow. City pundits had been virtually unanimous the Bank would leave rates at 3.75%.

The survey's headline business activity index registered 50.2 in February, down from January's 52.3, a whisker above the 50 "boom-bust" reading, and the lowest since January 2002.

"Panel members blamed the twin effects of depressed economic conditions and growing market uncertainty for the weakness in new business levels in February," it said, adding that war fears had hit spending by a growing proportion of clients. …

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