UK may be headed for a double dip recession post-lockdown: Report

The four-week long lockdown in the UK has jolted the market
with a looming threat of double dip recession, with a crucial market survey
indicating the biggest fall in the index since April.

According to the monthly survey done by IHS Markit and CIPS,
the purchasing managers’ index (PMI) dropped to 47.4 points in November from
52.1 in October.

Anything less than 50 is not a good sign for the market.

The setback is the biggest since April when the PMI
dropped to a record low of 13.8, meeting the virus attack with a shock too
big for the market to absorb. The dip was followed by a record resurgence in
the third quarter.

“A double-dip (recession) is indicated by the November survey
data, with lockdown measures once again causing business activity to
collapse across large swathes of the economy,” IHS Markit chief business economist
Chris Williamson said in a statement according to reports.

“As expected, hospitality businesses have been the
hardest hit, with hotels, bars, restaurants and other consumer facing service
providers reporting the steepest downturn,” he added.

The UK had entered its second lockdown from October 31,
which will be lifted on December 2, with certain restriction still in place.

The recession is said to be primarily due to the slump in service sector—eateries, pubs, hotels—where personal interaction is
especial.