- Chris Williamson, Markit's chief economist
The British services sector lost steam at the end of 2014, growing at the slowest clip in 19 months, adding to fears the UK economy is slowing. According to Markit Economics, services Purchasing Managers' Index dropped to 55.8 in December, compared with 58.6 recorded in the preceding month. That was the lowest reading since May 2013 and compared with economists expectations of 58.5. Markit said the data on services, manufacturing and construction sectors points to a slower growth rate of the UK economy in the final quarter of 2014. The economic output is projected to rise 0.5% in the three months through December, down from 0.7% in the previous three months. Therefore, the Bank of England policy makers are likely to maintain the benchmark interest rate at an all-time low 0.5% this week following their first policy meeting in 2015. The composite PMI, which includes surveys of the services, manufacturing and construction industries, also fell to the lowest level since May 2013 at 55.4, down from 57.8.
A separate report showed that Britons' demand for secured loans for house purchases fell markedly in the final quarter of 2014, while major lenders predict a slight rebound in the beginning of 2015. Despite house price record drop in December, Rightmove estimated that prices would continue to climb in 2015 by an average of 4% to 5%, spurred by a shortage of new property coming to market.
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