According to new data published by S&P Global on Friday, private sector companies in the UK have been downsizing workforces at the fastest rates seen since the 2008 global financial crisis with the exception of the Covid-19 pandemic lockdowns, leading output to fall in September.

The newest S&P Global Composite Purchasing Managers’ Index (PMI) reading for the UK fell to 46.8, a decline from August’s 48.6 reading and the lowest reading seen in 32 months. The reading came in lower than analysts expected, and was well below the 50 mark which separates growth from contraction, according to S&P Global.

Chris Williamson, chief business economist at S&P Global Market Intelligence, warned, “The disappointing PMI survey results for September mean a recession is looking increasingly likely in the UK.”

He added, “The steep fall in output signaled by the flash PMI data is consistent with GDP contracting at a quarterly rate of over 0.4%, with a broad-based downturn gathering momentum to hint at few hopes of any imminent improvement.”

S&P said that the jobs market in Britain is facing an “abrupt turnaround,” and as a result, companies have begun laying off staff at the fastest pace since the period following the 2008 global financial crisis, with the exception of the pandemic period.

Williamson added, “A major concern in the inflation outlook has been wage growth, but with the survey now signaling the sharpest fall in employment since 2009, wage bargaining power is being eroded rapidly.”

S&P concluded that overall, UK private sector business activity dropped at the fastest rate since March of 2009, due to the cost of living crisis and surging borrowing costs impacting demand.