UK services sector dished up a boost for the economy after summer slowdown 

UK services sector dished up a boost for the economy after summer slowdown 

View
comments

The services sector has given Britain's economy a well-needed boost

The services sector has given Britain's economy a well-needed boost

Britain's economy has picked up pace after a summer slowdown – but the recovery is heavily reliant on the services sector, a report showed yesterday.

Markit said its all-sector index of activity in the UK, where 50 is the cut-off between growth and decline, held firm at 55.7 in November.

This puts the economy on course for growth of 0.6 per cent in the final quarter of the year – up from 0.5 per cent seen in the third quarter.

Chris Williamson, chief economist at Markit, said: 'The UK continues to enjoy the "Goldilocks" scenario of solid economic growth and low inflation.' 

But the report fuelled fears of a two-speed recovery, with services companies booming while manufacturers and builders struggle.

The index for the services sector, which includes hotels, restaurants, legal firms and computing, rose to a four-month high of 55.9 in November. 

Mario Draghi, President of the European Central Bank (ECB), addressing the media during the press conference following a meeting of the ECB Governing Council in Frankfurt am Main, western Germany. Some of the debt-wracked eurozone countries are making "very substantial, very significant" progress on getting their finances in order, Draghi said.        AFP PHOTO / DANIEL ROLAND (Photo credit should read DANIEL ROLAND/AFP/Getty Images)
12/01/2012 Investors hit as stock market dives into the red and euro... An investor looks at an electronic board showing stock information at a brokerage house in Beijing, China, August 25, 2015.  
China's major stock indexes sank more than 6 percent in early trade on Tuesday, after a catastrophic Monday that saw Chinese exchanges suffer their biggest losses since the global financial crisis, destabilising financial markets around the world.  

REUTERS/Kim Kyung-Hoon China's slowdown continues to weigh on UK as economy grows... Share this article Share

But manufacturers have been in recession all year and saw their score fall to 52.7 last month, while the construction index slipped to 55.3.

The Bank of England looks set to leave interest rates at 0.5 per cent once again next week, with observers expecting the first hike since 2007 to come next year or in 2017.

Markit said wages in the services sector are picking up. Mr Williamson said: 'The upturn in earnings growth raises question marks over just how long inflation, and therefore interest rates, will remain low for.'

 

Additional information