Pubs, bars and restaurants were dealt a fresh blow today as data showed the UK's services sector had suffered a severe downturn in May.
The services sector has been battling the economic consequences of the coronavirus pandemic and lockdown.
As a result the closely watched UK services PMI survey came in at 29 for May, above an earlier flash estimate of 27.8, but still firmly in contraction territory.
A PMI reading below 50 represents a contracting market, with anything over 50 indicating a growing market economy.
The survey - run by IHS Markit - found that the 54% of respondents reported a drop in business activity during May, while only 13% signalled an increase.
A major issue has been the severe lack of new business to replace work that had been completed after the lockdown, following deep cutbacks to corporate spending in response to COVID-19.
Duncan Brock, director at the Chartered Institute of Procurement & Supply, said: "May’s survey data painted a deeply concerning picture of a lockdown slowdown across the service sector as employment dropped at the second fastest rate on record, pipelines of new work were woefully empty and business confidence continued to suffer.
"As the pandemic progressed any hoped-for bounceback in business output never really got going in May following the previous month’s awful results, though a modicum of recovery will offer small respite in some sectors."
The services sector is the lifeblood of the UK economy. Industries in the sector include retail, financial services and all leisure.
It accounts for 81% of economic output and 84% of the workforce.
Earlier in the week the UK manufacturing purchasing manager’s index came in at 40.7 for May, only marginally better than the 32.6 recorded in April.
UK manufacturing remains in its worst slump since records began nearly 30 years ago.
The data comes as government budget forecasters have set out a scenario under which the British economy could contract as much as 35% in the three months to June due to the lockdown, and for annual output to fall by the most in more than 300 years.
