The U.K. service sector activity expanded at the slowest pace in more than three years in April largely reflecting economic uncertainty ahead of the referendum on EU membership, survey data from Markit showed Thursday.
The Chartered Institute of Procurement & Supply/Markit services Purchasing Managers' Index fell more-than-expected to 52.3 in April from 53.7 in March. A reading above 50 indicates expansion.
The current 40-month sequence of uninterrupted growth was the second longest in the survey history.
Nonetheless, the rate of expansion slowed for the third time in the past five months to reach its lowest level since February 2013. The expected score was 53.5.
The survey suggests that economic growth will soften further in the near term, perhaps until the uncertainty surrounding the EU referendum is resolved, Scott Bowman at Capital Economics, said.
"The deterioration in April pushes the surveys into territory which has in the past seen the Bank of England start to worry about the need to revive growth, either by cutting interest rates or through non-standard measures such as QE," said Chris Williamson, chief economist at Markit.
Although new business growth picked up slightly, it remained relatively subdued and business optimism was the joint-weakest in over three years, Markit said. Firms delayed placing new contracts citing concerns over the forthcoming referendum.
The level of outstanding business dropped for the second time in 2016 so far, reflecting the ongoing relatively weak growth in new business.
At the same time, service sector employment increased at the weakest pace in over two-and-a-half years, underlining the overall subdued nature of business conditions in the sector.
Input costs hit a 27-month high in April, largely due to the introduction of the national living wage. That said, input cost inflation stayed below the long-term average, and firms raised their own prices at a subdued pace.
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April 24, 2026 15:15 ET Economics news flow was relatively light this week even as the conflict in the Middle East continued, raising concerns for policymakers. In the U.S., spending data, initial jobless claims and pending home sales were the highlights. Business confidence in the biggest euro area economy was in focus in Europe. Inflation data from Japan gained attention in Asia.