UK recession risk mounts as higher rates weigh on firms

Service sector and manufacturing output falls, with cost of living crisis also hitting businesses

• Business live – latest updates

Britain’s economy is at growing risk of recession after industry figures showed the sharpest monthly fall in private sector activity, outside of the Covid pandemic, since the financial crisis.

In a sign that higher interest rates and the cost of living crisis are combining to depress consumer demand, the latest snapshot from S&P Global and the Chartered Institute of Procurement and Supply (Cips) showed a steep drop in the UK’s dominant service sector and manufacturing output in September.