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The UK service sector growth weakened in August largely due to supply chain disruptions and the normalization of customer demand after the initial loosening of pandemic restrictions, final survey data from IHS Markit showed on Friday.

The Chartered Institute of Procurement & Supply final services Purchasing Managers’ Index dropped to 55.0 from 59.6 in the previous month. The flash reading was 55.5.

The index has posted above the 50.0 no-change value in each of the past six months, but the rate of expansion was the slowest since the service sector returned to growth after lockdown.

There were widespread reports that shortages of staff and disrupted supply chains had constrained growth in August. Staff recruitment picked up to its strongest since the survey began in July 1996.

The overall rate of cost inflation eased since the previous month, but was the second-fastest seen over the past 25 years. Prices charged inflation eased only slightly from July’s peak.

The survey showed that service providers remain highly optimistic about the outlook for business activity growth during the next 12 month.

At 54.8 in August, the composite output index fell from 59.2 in July. The score was also below the flash estimate of 55.3.


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