Yet another marker that a double-dip looms

Services, the biggest and most important sector, is slowing.

The last of the three CIPS/Markit Purchasing Manager's Index (PMI) indices that are published every month hit the streets this morning. Each month, we get data for construction, manufacturing and services from these surveys, which are much more timely than the official data -- and they have the advantage that they don't get revised. They also have pretty good predictive power. I have already reported here on the horrid data for construction and manufacturing, so the services sector report was going to be vitally important. Not least because services are the biggest and most important sector. Needless to say, the news was appalling.

The services business activity index fell over 4 points to just above 51; its sharpest fall for a decade and the lowest level since the end of last year. The worry is that it is heading much lower into territory suggesting outright contraction. The decline in the index was greater than those seen in the autumn of 2008 (following the collapse of Lehman Brothers) and was surpassed only by the foot-and-mouth related fall of April 2001. With underlying trends in activity and new business weakening, and confidence regarding the future down, a further drop in service sector employment was recorded in August. Respondents noted the non-replacement of leavers or forced redundancies, as they engaged in restructuring or had insufficient work relative to capacity. Unemployment looks likely to rise further.

The combination of data from the three PMIs plotted in the chart makes the prospect that there will be little or no growth during the rest of the year highly likely. The declines in the three PMIs in 2007 predicted what was to come well before the official data, which didn't start to show sharp falls until well into 2008, so the concern is that these drops suggest there are bad things to come. Indeed, the prospects of a double-dip are rising fast.

Chris Williamson, chief economist at Markit, also has concerns that look right.

The PMI surveys collectively pointed to a near-stagnation of economic growth in August, signaling an increased risk that GDP growth in the third quarter could be even weaker than the 0.2 per cent rise seen in the three months to June. Forward-looking indicators also suggest that the economy could weaken further at the end of the quarter, raising the prospect of a slide back into contraction in Q4 -- if not in Q3 -- and will provide ammunition for those seeking a further injection of stimulus into the economy by the Bank of England. The all-sector PMI is at a level which has always triggered interest rate cuts in the past.

This data makes the MPC decision this week a close call: they will leave interest rates untouched as they have every month since March 2009. As a consequence of the recent round of poor data, though -- including stagnation on the jobs front in the United States and an evolving crisis in the eurozone -- the chances the MPC will move to doing more asset purchases (ie QE, at their meeting this week) has risen. These are the sort of circumstances under which a central bank pulls a surprise in order to show the markets that, in contrast to the Chancellor, they are up to the task.

If they don't act at this meeting, it is all but certain they will do so at their October meeting. Adam Posen looks to have been spot on.

David Blanchflower is economics editor of the New Statesman and professor of economics at Dartmouth College, New Hampshire

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Labour is a pioneer in fighting sexism. That doesn't mean there's no sexism in Labour

While we campaign against misogyny, we must not fall into the trap of thinking Labour is above it; doing so lets women members down and puts the party in danger of not taking them seriously when they report incidents. 

I’m in the Labour party to fight for equality. I cheered when Labour announced that one of its three Budget tests was ensuring the burden of cuts didn’t fall on women. I celebrated the party’s record of winning rights for women on International Women’s Day. And I marched with Labour women to end male violence against women and girls.

I’m proud of the work we’re doing for women across the country. But, as the Labour party fights for me to feel safer in society, I still feel unsafe in the Labour party.

These problems are not unique to the Labour party; misogyny is everywhere in politics. You just have to look on Twitter to see women MPs – and any woman who speaks out – receiving rape and death threats. Women at political events are subject to threatening behaviour and sexual harassment. Sexism and violence against women at its heart is about power and control. And, as we all know, nowhere is power more highly-prized and sought-after than in politics.

While we campaign against misogyny, we must not fall into the trap of thinking Labour is above it; doing so lets women members down and puts the party in danger of not taking them seriously when they report incidents. 

The House of Commons’ women and equalities committee recently stated that political parties should have robust procedures in place to prevent intimidation, bullying or sexual harassment. The committee looked at this thanks to the work of Gavin Shuker, who has helped in taking up this issue since we first started highlighting it. Labour should follow this advice, put its values into action and change its structures and culture if we are to make our party safe for women.

We need thorough and enforced codes of conduct: online, offline and at all levels of the party, from branches to the parliamentary Labour party. These should be made clear to everyone upon joining, include reminders at the start of meetings and be up in every campaign office in the country.

Too many members – particularly new and young members – say they don’t know how to report incidents or what will happen if they do. This information should be given to all members, made easily available on the website and circulated to all local parties.

Too many people – including MPs and local party leaders – still say they wouldn’t know what to do if a local member told them they had been sexually harassed. All staff members and people in positions of responsibility should be given training, so they can support members and feel comfortable responding to issues.

Having a third party organisation or individual to deal with complaints of this nature would be a huge help too. Their contact details should be easy to find on the website. This organisation should, crucially, be independent of influence from elsewhere in the party. This would allow them to perform their role without political pressures or bias. We need a system that gives members confidence that they will be treated fairly, not one where members are worried about reporting incidents because the man in question holds power, has certain political allies or is a friend or colleague of the person you are supposed to complain to.

Giving this third party the resources and access they need to identify issues within our party and recommend further changes to the NEC would help to begin a continuous process of improving both our structures and culture.

Labour should champion a more open culture, where people feel able to report incidents and don't have to worry about ruining their career or facing political repercussions if they do so. Problems should not be brushed under the carpet. It takes bravery to admit your faults. But, until these problems are faced head-on, they will not go away.

Being the party of equality does not mean Labour is immune to misogyny and sexual harassment, but it does mean it should lead the way on tackling it.

Now is the time for Labour to practice what it preaches and prove it is serious about women’s equality.

Bex Bailey was on Labour’s national executive committee from 2014 to 2016.