-Chris Williamson, economist at Markit
The U.K. service sector expanded much faster than it was initially expected last month, as new business increased at its fastest rate in over three years, Markit and the Chartered Institute of Purchasing & Supply said Wednesday. According to official data, a gauge of activity in services sector surged to 54.9 in May compared with 52.9 in the preceding month, recording the strongest reading since March 2012 and beating the top forecast of 53.6. The improvement was supported by better weather conditions and a rise in new orders, which hit the highest level since February 2010.
At the moment, service sector is the strongest pillar of the U.K. economy and accounts around 77% of overall GDP, and the better-than-expected reading is adding to signs the economy is on the path of sustained recovery. During the first quarter of this year, the economy registered a strong output growth of 0.6% in the services sector, pulling the overall economy out of the claws of falling into a triple-dip recession. Britain's economy grew 0.3% in the first quarter, and the recent data is bringing another relief to the nation's finance minister George Osborne, who is facing criticism from the IMF for his austerity programme.
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