Business and consumer confidence have reached new lows according to separate studies reported today.
A survey by the Chartered Institute of Purchasing and Supply (CIPS) and NTC showed its index of activity dropped to its lowest since 2003 and the Nationwide’s consumer index fell seven points to its lowest in four years.
The CIPS figure lowered to 50.3 and, as any number below 50 denotes contraction, analysts are concerned.
James Knightley, economist at ING financial markets, told the Guardian: "With the manufacturing index also hovering just above the breakeven 50 level this is a very worrying development."
Consumers were also unhappy with the economy the Nationwide surveyed 1,000 people and based on their opinions its index of sentiment dropped seven points to 70.
The UK’s service sector has expanded slowly and house prices are falling, although there is yet to be a consensus on the Bank’s next rate cut.