LONDON (Reuters) - The historic slump across British businesses levelled off last month as some of the economy reopened following an easing of the coronavirus lockdown, a business survey showed on Friday.
The IHS Markit/CIPS UK Services Purchasing Managers' Index (PMI) rose to 47.1 from 29.0 in May, slightly higher than a preliminary reading of 47.0 but still below the 50 threshold for growth.
"Encouragingly, more than one-in-four service providers reported an expansion of new business during June, which was commonly attributed to pent-up demand and the phased restart of the UK economy," said Tim Moore, economics director at IHS Markit, which compiles the survey.
"However, lockdown measures continued to hold back travel and leisure, while companies across all main categories of service activity commented on subdued underlying business and consumer spending in the wake of the COVID-19 pandemic."
The survey showed 33% of services businesses, which account for the vast bulk of Britain's economy, reported a drop in activity, down from 54% in May, while 28% reported a rise.
The composite PMI, which combines the services and manufacturing sector, rose to 47.7 in June, up from 30.0 in May and again slightly higher than a preliminary reading of 47.6.
In June, the Bank of England said Britain's economy looked on course to have shrunk by around 20% in the first six months of 2020 - a smaller decline than it had first feared, but still one of the biggest annual drops in 300 years.
British finance minister Rishi Sunak is due to announce his next steps for steering the economy back towards recovery on July 8.
(Reporting by Andy Bruce; Editing by Hugh Lawson)