Output in the services sector of the UK economy collapsed this month, according to preliminary data from PMI surveys that was published yesterday. It fell from 58.9 last month to 51.8 in the current period.

A reading of below 50 signals contraction, and it appears that output is heading in that direction, according to forward-looking indicators. Manufacturing output also fell, but by a less significant amount than services, which makes up around 80% of GDP.

Companies' costs hit another all-time high as energy bills skyrocketed. There is no cap on commercial fuel bills, so they face the full impact of the current crisis.

The survey points to the economy virtually grinding to a halt. The data will also have an effect on the Bank of England's plans to tighten monetary policy further after hikes at four consecutive meetings. Activity has slumped to a fifteen-month low, which was a direct result of the Covid lockdowns at the time.

It now looks likely that the Government will introduce measures to help the poorest families cope with the rising cost of energy as the energy cap is set to rise to £2,800 a year in October from its current level just shy of £2,000.

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