LONDON, Feb. 5 (Xinhua) -- A new survey published on Tuesday showed that growth in the dominant services sector was subdued and increasing at a slower rate as it suffers the effects of Brexit uncertainty.

The drop in the business activity index of the IHS Markit/CIPS services survey from 51.2 in December to 50.1 in January (above 50 represents growth) leaves the survey at its lowest level for two and a half years and points to GDP stagnating in Q1.

January data indicated a renewed loss of momentum for the services sector, with a decline in incoming new work reported for the first time since July 2016.

A number of service providers reported that Brexit-related concerns had dampened client demand and resulted in delayed decision making on new projects.

Sector data suggested that transport, communication and financial intermediation were the weakest performing areas of service sector activity.

Thomas Pugh, UK economist at London-based Capital Economics, told Xinhua: "It certainly seems that there is a Brexit effect in these figures, but we must be careful because there is a global slowdown going on and it is difficult to tease out what is due to Brexit and what to the global slowdown -- there has been a similar fall in the PMI (purchasing managers' index) in the eurozone."

Subdued demand conditions meant that business activity was broadly flat at the start of 2019, while concerns about the economic outlook weighed more heavily on jobs growth, and the data pointed to an overall reduction in payroll numbers for the first time in just over six years.

Backlogs of work also declined in January for the fourth successive month and deteriorating at one of the steepest rates since 2012, which may suggest that uncertainty over both Brexit and the slowing global economy are now weighing on employment choices, said Pugh.

"We have seen some quite sharp falls in the new orders index, which has fallen really sharply in the past six months or so, and the same goes for the employment index," Pugh said.

"That is what you would expect to see if there was a concern about a slump in future output."

Pugh noted that the the forward-looking indices sent conflicting messages -- the new orders index fell to its lowest since mid-2016, which may mean that firms are cautious about placing new orders because of Brexit uncertainty.

However, he pointed out, the future activity index rose, indicating that there is still buoyancy in the economy, which could be released with a successful resolution of Brexit.