LONDON: The UK services sector, one of the main drivers of the country's economy, is contracting at a record rate, with figures from the latest monthly report compiled by the Chartered Institute of Purchasing and Supply and Markit at their lowest levels since the survey began in 1996.

Currently, the Purchasing Managers' Index – which assesses everything from new business to jobs and output – stands at 40.1, compared with the score of 50.0 which constitutes equilibrium across the sector at large. 

Most estimates suggest that service industries comprise around two-thirds of the UK economy, and the latest findings follow record drops in the nation's manufacturing and construction industries.

James Knightley, a strategist at ING Financial Markets, says: "Given the weakness across all purchasing managers' indices, it looks as though we could see the economy contract by close to 1% in the fourth quarter. 

"The first quarter of 2009 is likely to be similarly weak given the long lead times before the policy stimulus we have seen can take effect, especially since the monetary policy transmission mechanism is not functioning properly.”

Data sourced from; additional content by WARC staff