The economic recovery from the first wave of the Covid-19 pandemic began to flatten out this month in the UK and threatened to reverse and trigger a double-dip recession in the eurozone after new restrictions to tackle the second wave squeezed business activity. As the UK government moved to bolster its business support schemes, a closely watched survey of business activity showed private sector growth in the UK falling back as hospitality and transport companies struggled to cope with regional lockdown measures. The IHS Markit/CIPS Flash UK Composite PMI data index fell to 52.9 for October so far, compared with 56.5 at the end of September. A figure above 50 indicates a period of expansion. IHS Markit said the “flash” survey was based on responses from about 85% of the usual survey replies. Manufacturing businesses were the most resilient after a bounce-back in trade to countries that have succeeded in suppressing the virus, mainly in Asia. Output continued to increase at a strong pace. However, the services sector suffered from the rise in UK virus cases and government moves to restrict households from mixing in the north of the country. Chris Williamson, the chief economist at IHS Markit, which collects the data, said: “The pace of UK economic growth slowed in October to the weakest since the recovery from the national Covid-19 lockdown began.” He added:“The slower growth of output, the renewed fall in demand and further deterioration in the labour market suggest the economy started the fourth quarter on a weakened footing.” The consultancy Capital Economics said the decline in growth showed that the broader economy would flatline in the final quarter of the year. Williamson said companies abroad had been stockpiling British goods ahead of the Brexit deadline at the end of the year. Without this extra buying the slowdown would have been even more pronounced. Stockpiling also accounted for the strong growth in eurozone manufacturing, though this was again offset by the services industry, which sank more than expected to a PMI of 46.2, from 48.0. Almost 90% of economists polled by Reuters this week said there was a high risk the coronavirus resurgence would halt the nascent eurozone economic recovery. “The eurozone PMI confirms that the second wave of the coronavirus is weighing more and more on the economy. A double-dip in the fourth quarter is becoming more likely at this rate,” said Bert Colijn at ING. IHS Markit’s Flash eurozone PMI fell to 49.4 from September’s final reading of 50.4. “The further decline in the eurozone Composite PMI in October adds to the evidence that the second wave of infections, and the new wave of containment measures, is taking a heavy toll on the economy,” said Jack Allen-Reynolds at Capital Economics.