Final reading confirms the biggest ever one­month decline for UK services PMI

Data released earlier on Wednesday by Markit and the Chartered Institute of Procurement & Supply showed UK's services sector, which accounts for more than 75 percent of the country's GDP, is tumbling towards a recession. The headline reading came in at 47.4 for July, confirming the flash estimates. It was the first contraction in UK services sector in more than four years. The reading also showed the sharpest decline in both output and new business in the services sector in more than seven years.

Details of the report suggest significant headwinds for near-term outlook. Backlogs of work and new orders fell markedly, while the forward-looking business expectations component fell sharply to 57.6, also its lowest since March 2009.

Bank of England is meeting today and is likely to announce substantial easing measures tomorrow. Weakness in the survey measure is likely to shape the Bank of England's Monetary Policy Committee’s thinking as it debates the scale of stimulus the economy needs in the aftermath of the referendum.

"At these levels, the PMI data are collectively signalling a 0.4% quarterly rate of decline of GDP. The unprecedented month-on-month drop in the all-sector index has undoubtedly increased the chances of the UK sliding into at least a mild recession," said Markit's chief economist, Chris Williamson.