May 5, 7:36 AM EDT

A key economic indicator is showing that the U.K, economy is showing that growth is stagnating amid fears of the looming referendum on whether Britain should remain in the European Union

AP Photo
AP Photo/Francois Walschaerts

Photo Gallery
Animal census at the London Zoo
Latest News from Britain
Londoners cast votes Thursday in an election that could give the city its first Muslim mayor, while voters elsewhere in Britain were expected to punish the main opposition Labour Party in local and regional polls

British Prime Minister David Cameron has toned down his comments on Donald Trump, saying the Republican presidential hopeful deserves respect _ but was wrong to call for a ban on Muslims entering the United States

The New Day newspaper is shutting down in Britain _ only nine weeks after it started _ after circulation was far below expectations

A key economic indicator is showing that the U.K, economy is showing that growth is stagnating amid fears of the looming referendum on whether Britain should remain in the European Union

British Prime Minister David Cameron says advocates of leaving the European Union have not thought through the impact it would have on trade

The British government has bowed to pressure and agreed to take in unaccompanied children from Syria who have made their way to Europe

A district summary of the Beige Book
Measuring economic stress by county nationwide
Mall malaise: shoppers browse, but don't buy
Unemployment by the numbers
Family struggles with father's unemployment
Saying an affordable goodbye
Hard times hit small car dealer
Latest Economic News
A key economic indicator is showing that the U.K, economy is showing that growth is stagnating amid fears of the looming referendum on whether Britain should remain in the European Union

Egypt has extended the suspension of a capital gains tax on the stock market until May 2017

Survey: Growth at US services firms strengthened in April after economy's weak start to 2016

Germany has raised its forecast for government tax income this year and beyond thanks to a healthy economy and low unemployment, bolstering its insistence that it can continue to avoid running up new debt

As winter turned to spring, the eurozone economy appears to have lost some _ but by no means all _ of the momentum that saw it grow faster than the U.S. in the first quarter of the year

A spiraling Puerto Rico debt crisis reaches a new milestone as the island misses nearly $370 million in bond payments and officials warn of worse to come if Congress doesn't help it dig out from a mountain of debt

Investor Warren Buffett says Federal Reserve generally doing a good job with fiscal policy, but it's hard to predict all the effects of prolonged low interest rates

A private survey says U.S. manufacturers expanded in April for the second straight month, suggesting that factories are adapting to a strong dollar and economic weakness overseas

The eurozone economy has grown back to the size it was back in 2008 _ here's a look at some other key indicators for the 19-country bloc, comparing its situation eight years ago with where it is now

US economy barely grew at the start of election year, as consumers, businesses turn cautious

Greece's Debt Threatens to Spread
State budget
gaps map
Auto industry problems trickle down, punish Tennessee county
Women give old Derby hats a makeover in tough economy
S.C. town deals with highest unemployment in South
How mortgages were bundled and sold as securities
Tracking the $700 billion financial bailout
Tracking the year's job losses
State-by-state foreclosures since 2007
Credit crisis explained
Presidents and their economic legacies
Lexicon of the financial crisis
Americans' addiction to debt

LONDON (AP) -- Uncertainty over Britain's looming vote on whether to remain in the European Union is weighing on the nation's economy, with another key indicator showing Thursday that growth is close to stagnating.

A gauge of activity in the services sector - the so-called Markit/CIPS purchasing managers' index - dropped more than expected in April to 52.3 points from 53.7 in March, the lowest since February 2013. The figure is on a 100-point scale, with the level of 50 separating contraction from expansion.

Because nearly 80 percent of Britain's economy is based on services, the drop points a broad-based slowdown.

"Uncertainty emanating from the EU referendum has brought the recovery to its knees," said Samuel Tombs, the chief U.K. economist for Pantheon Macroeconomics.

The pessimism was reflected in two other surveys this week, with contractions in manufacturing activity and a slowdown in construction.

The surveys are closely watched by the Bank of England as an overall gauge of the economy's strength. Chris Williamson, the chief economist at financial information provider Markit, said the surveys show growth grinding to a near halt after the economy expanded by a quarterly 0.4 percent in the first three months of 2016.

"The deterioration in April pushes the surveys into territory which has in the past seen the Bank of England start to worry about the need to revive growth, either by cutting interest rates or through non-standard measures such as quantitative easing," Williamson said. Quantitative easing is a form of stimulus in which a central bank typically buys bonds from banks as a way to boost lending.

The surveys revived worry about a country still struggling to overcome the lingering impact of the 2008 financial crisis. James Sproule, chief economist at the Institute of Directors, argued that underlying factors besides a possible British exit from the EU - or "Brexit" - may be feeding into a "less than rosy economic picture."

"The question we must ask is whether growth is built on solid foundations," he said. "My concern is that the exceptional period we are living in of low rates and cheap money is not the basis of a sustainable economy."

© 2016 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. Learn more about our Privacy Policy and Terms of Use.