Britain’s economy slowed in April and may stall as consumers worry about June’s EU referendum, reaching levels at which in the past the Bank of England began to consider rate cuts, a survey of the dominant services industry showed. 
If last month’s weakness persists, economic growth may be just 0.1% in the second quarter, down from 0.4% in the first three months of this year, financial data company Markit said yesterday. 
That would be the weakest quarterly reading since late 2012. 
Markit chief economist Chris Williamson said the deterioration in April pushed the surveys into territory which “has in the past seen the Bank of England start to worry about the need to revive growth” by easing monetary policy. 
The services sector grew at its lowest rate in more than three years, according to Markit’s activity index, which fell to 52.3 from 53.7 in March, below the lowest forecasts in a Reuters poll of economists.  Companies said uncertainty about the referendum and weakness in the global economy were worrying the main drivers of Britain’s recovery: its consumers.  “In combination with the weaker-than-expected manufacturing index earlier in the week that points to a pretty subdued Q2 GDP reading,” Alan Clarke, strategist at Scotiabank said, predicting a less marked slowdown to 0.2% in the second quarter. 
“The (BoE) has told us that it will be a little less sensitive than usual to the hard data given the EU referendum uncertainty. Nonetheless, a ... GDP number of 0.2% quarter-on-quarter (or lower) is likely to test the patience of some of the doves.” 
Sterling fell while gilts showed little reaction to the data. 
Britain’s economy has outpaced much of the rest of the rich world over the past three years. But it has been showing signs of slowing since late last year.  Economists generally believe a Brexit vote on June 23 would deal at least a short-term blow to the economy, possibly prompting the BoE to cut already record-low interest rates or expand its bond-buying programme. 
But it would also probably weaken the pound, adding to inflation and making it more difficult for the BoE to act.  Thursday’s survey showed growth in input costs paid by service companies were the highest in over two years in April, suggesting that a gradual rise in inflation will continue. 



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