By Ian McConnell

THE UK private-sector economy contracted for a third consecutive month in October and is enduring its toughest spell since early-2009, while job losses are among the “fiercest” in a decade, a senior economist has declared.

Chris Williamson, chief business economist at IHS Markit, was commenting after a survey from the Chartered Institute of Procurement and Supply showed that UK services sector output stagnated in October, having declined during the previous month.

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CIPS’s business activity index for services edged up to the 50 no-change mark last month, from 49.5 in September, on a seasonally adjusted basis.

However, the sector’s new business intake fell at the fastest pace since April. And new export business tumbled at a rate close to September’s near-record pace. The services sector cut employment in October – the fifth month so far this year in which workforce numbers have declined.

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CIPS said: “Companies continued to link lower new work to uncertainty surrounding Brexit. Uncertainty around Brexit also undermined international demand for UK-based services.”

Other surveys published this month by CIPS, compiled by IHS Markit, showed declines in manufacturing and construction activity in October.

The IHS Markit/ CIPS all-sector purchasing managers’ index, a composite measure of changes in activity in the manufacturing, construction and services sectors, edged up from 48.8 in September to 49.5 last month on a seasonally adjusted basis. While signalling a slight slowing in the rate of decline, it remained below the level of 50 deemed to separate expansion from contraction to signal a third consecutive monthly fall in UK private-sector activity.

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Mr Williamson said the October reading was historically consistent with gross domestic product declining at a quarterly rate of 0.1 per cent.

Commenting on the employment picture, Mr Williamson said: “The lack of new order inflows and uncertainty about the outlook also continued to dampen firms’ appetite to take on staff. Employment fell overall in October, with the rate of job losses easing only slightly on September to remain one of the fiercest since 2009. Net job losses were recorded in all three sectors for the second month running.”

On a more positive note, he observed that survey responses later in October, after the threat of a no-deal Brexit had receded, were generally stronger than those earlier in the month.