THE economy barely grew in the third quarter of the year and is near stagnation, according to the company behind a closely-watched economic survey.

The Markit/Cips purchasing managers’ index (PMI) for services found growth in the sector slowed last month.

The PMI reading for services fell to 52.2 from 53.7 in August. A reading above 50 indicates expansion. Similar surveys for manufacturing and construction indicated these sectors contracted. It also found staffing levels had dropped for the first time in ten months, but there was good news with the biggest rise since May for new orders.

Chris Williamson, chief economist at Markit, said: “GDP is likely to have grown by perhaps 0.1 per cent as modest growth of services activity was offset by a slight drop in construction sector output and a steeper decline in manufacturing, according to the PMIs.”

The economy has contracted for three quarters in a row, beginning in the final quarter of last year. The Bank of England will announce the outcome of the latest meeting of its Monetary Policy Committee today. It is not expected to announce any change to interest rates, or to its programme of quantitative easing, which is being expanded to £375bn after a further £50bn was added in July.