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U.K. Economy Seen Slowing Sharply on Record Staff Shortages

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Britain’s economy grew at the slowest pace since the height of lockdown in February, which purchasing managers blamed on staff shortages that left them unable to meet demand.
 
IHS Markit said its survey showed a reading of 55.3 in August, well below the 58.7 predicted by economists. That reflected the lowest level of activity in six months for services and manufacturing.
 
While almost all restrictions in the U.K. have been lifted, virus cases remain high, meaning the number of companies saying shortages of staff and materials were hurting growth was a record 14 times the normal level. Still efforts to rebuild capacity prompted the fastest rise in employment numbers since Markit’s survey began in 1998.
 
“There are clear signs of the recovery losing momentum in the third quarter after a buoyant second quarter,” Chris Williamson, chief business economist at IHS Markit said Monday. “Rising virus case numbers are deterring many forms of spending, notably by consumers, and have hit growth via worsening staff and supply shortages.”