This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at http://www.guardian.co.uk/business/2013/may/03/uk-service-sector-grows-markit-cips-pmi
The article has changed 4 times. There is an RSS feed of changes available.
| Version 0 | Version 1 |
|---|---|
| UK service sector grows faster than expected | UK service sector grows faster than expected |
| (about 1 hour later) | |
| Hopes that Britain's economy could be stabilising were bolstered on Friday by a report that services companies have enjoyed their strongest business since the Olympics. | |
| Activity came in higher than expected and at its strongest for eight months in the closely watched Markit/CIPS PMI survey of the UK's dominant services sector. | Activity came in higher than expected and at its strongest for eight months in the closely watched Markit/CIPS PMI survey of the UK's dominant services sector. |
| At 52.9 the headline index for April was above economists' forecast for it to hold at 52.4 and well clear of the 50-mark that separates growth from contraction. The report followed forecast-beating results in the PMI surveys for the smaller construction and manufacturing sectors earlier this week and fanned hopes that the UK economy has gotten off to a steady start in the second quarter of the year. | |
| "The three UK PMI surveys collectively signalled the fastest rate of economic growth for eight months in April. The improvement reflected a strengthening upturn in service sector business activity, a return to marginal growth in the manufacturing sector and a near-stabilisation of construction," said Chris Williamson, chief economist at survey compilers Markit. | "The three UK PMI surveys collectively signalled the fastest rate of economic growth for eight months in April. The improvement reflected a strengthening upturn in service sector business activity, a return to marginal growth in the manufacturing sector and a near-stabilisation of construction," said Chris Williamson, chief economist at survey compilers Markit. |
| "The surveys provide the first evidence that the faster than expected economic growth seen in the first quarter persisted at the start of the second quarter," he added, but noted the rate of GDP growth signalled by the PMIs "remains frustratingly modest". | |
| Official data last month suggests that after contracting at the end of 2012 the UK economy grew again in the first quarter of this year, beating expectations with 0.3% expansion. Although only a first estimate that could be revised up or down, that growth was eked out against the backdrop of unusually harsh weather and removed most fears that the UK had slipped back into recession. | |
| The services report, which covers a wide range of businesses such as transport, hotels and computing, showed the strongest rise in new work in almost a year as companies cited new products, better weather and increased overseas demand. There was also "modest" jobs growth in the sector, the report said. | |
| Economists said the stronger-than-expected activity reduced the chances the Bank of England would step in with more stimulus any time soon. The Banks's nine-member monetary policy committee (MPC) meets next week to decide whether to inject more electronic cash into the economy by extending its programme of quantitative easing (QE). | Economists said the stronger-than-expected activity reduced the chances the Bank of England would step in with more stimulus any time soon. The Banks's nine-member monetary policy committee (MPC) meets next week to decide whether to inject more electronic cash into the economy by extending its programme of quantitative easing (QE). |
| "Overall the trio of good PMIs this week largely draw the line under the discussion over any more QE from the MPC next week," said David Tinsley at BNP Paribas. | "Overall the trio of good PMIs this week largely draw the line under the discussion over any more QE from the MPC next week," said David Tinsley at BNP Paribas. |
| "It was going to be pretty hard for the three voting for more asset purchases to convince the rest in any case, with a GDP print for the first quarter very much in line with February inflation report forecasts." | "It was going to be pretty hard for the three voting for more asset purchases to convince the rest in any case, with a GDP print for the first quarter very much in line with February inflation report forecasts." |
| Warnings remained, however, that the UK faces many headwinds, including a squeeze on household finances and an uncertain global economic outlook. | Warnings remained, however, that the UK faces many headwinds, including a squeeze on household finances and an uncertain global economic outlook. |
| The services report also showed business confidence remained subdued, noted Martin Beck at Capital Economics. "An improvement in April's CIPS/Markit report on services joined the upticks already seen in the manufacturing and construction surveys in suggesting the second quarter has got off to a good start," eh said. "But even with these positive signs, there is still little indication of the economy breaking out of an environment of fairly insipid growth." | |