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The U.K.’s dominant services sector was the weakest since March last month as new work dried up.

With the nation under a cloud of political uncertainty from Brexit and the looming election, IHS Markit’s Purchasing Managers Index for the industry fell to 49.3 in November, the firm said Wednesday. That’s a slightly shallower slowdown than indicated by a flash estimate of 48.6.

The pound held gains after the report and traded at $1.3041 at 9:38 a.m. in London.

Still, the assessment of the economy remains bleak, with the firm saying its composite reading was consistent with a 0.1% quarterly contraction.

“November’s PMI surveys collectively suggest that the U.K. economy is staggering through the final quarter of 2019,” said Tim Moore, economics associate director at IHS Markit.

Key Insights

  • Incoming work fell for a third month, while demand from export markets dropped at the fastest pace since the index began in 2014
  • “A number of firms reported that a lack of clarity in relation to Brexit had resulted in delays to business investment decisions among overseas clients,” Markit said
  • A measure of optimism among firms improved to a four-month high, although firms noting this was “contingent on hopes of a more stable political and economic landscape”
  • Companies are focusing on existing contracts as they struggle to get new work, leading to a loss in jobs
  • A measure of input cost inflation eased to its lowest in more than three years

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  • November’s figures are the first to reflect Markit’s new reporting process, where a flash estimate, based on 85% of responses, is followed by a final reading.
  • This week’s readings are the last before the U.K.’s election on Dec. 12

To contact the reporter on this story: David Goodman in London at dgoodman28@bloomberg.net

To contact the editors responsible for this story: Paul Gordon at pgordon6@bloomberg.net, Brian Swint

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