Momentum in Britain's economy slowed much more than expected this month, adding to recession worries as inflation pressures ratcheted higher, according to a business survey on Tuesday that showed rising pessimism.

S&P Global's flash Composite Purchasing Managers' Index (PMI), a monthly gauge of the services and manufacturing industries, fell to 51.8 in May from 57.6 in April, its lowest level since February last year.

The preliminary reading was worse than all forecasts in a Reuters poll of economists, which had pointed to a drop to 57.0.

The PMI is likely to raise new questions about the strength of demand in Britain's economy, where inflation at a 40-year high of 9% has contributed to record-low levels of consumer confidence.

"The latest data indicate a heightened risk of the economy falling into recession as the Bank of England fights to control inflation," said Chris Williamson, chief business economist at S&P Global Market Intelligence.

The slowdown was most acute in the dominant services sector, where businesses' optimism about the coming 12 months fell to its lowest level since May 2020 - during the first coronavirus lockdown.

"Companies cite increasingly cautious moods among households and business customers, linked to the cost-of-living crisis, Brexit, rising interest rates, China's lockdowns and the war in Ukraine," Williamson said.

Reports of rising costs paid by businesses were more widespread than at any point since the services PMI started in 1996.

Williamson said there were some signs cost pressures may be peaking, and some businesses reported resistance from customers to higher prices and reduced demand.

The flash PMI for the manufacturing sector also fell in May to 54.6 from 55.8 in April, marking its lowest level since January 2021.

New export orders declined at the fastest rate since May 2020, with a number of manufacturers citing Brexit trade frictions as the main reason for the drop.

Williamson said forward-looking indicators for the services and manufacturing sectors suggested worse was to come.

(Reporting by Andy Bruce; Editing by Catherine Evans)