- Chris Williamson, chief economist at Markit
While the neighbouring is struggling amid slackening growth and geopolitical tensions, the U.K. is enjoying robust economic performance. British services industry expanded at the fastest pace in almost a year in August, yet some signs point to a likelihood that the crisis in Ukraine may cool the sector down. In a report, Markit said the seasonally adjusted Markit/CIPS services PMI climbed to 60.5 in August from a reading of 59.1 in the preceding month. Analysts, however, had expected the index to decline to 58.5 in August. The latest advance was underpinned by strong gains in new business and forecasts by services companies that their clients wanted to increase their purchasing spend. Employment increased in August and the latest jump in new work was well above the survey average, according to Markit. The only disappointing aspect was a decline in the confidence of service firms in the outlook for the upcoming 12 months, as business morale index fell to a 15-month low amid prospects of higher interest rates and geopolitical risks abroad. The strength in services contrasts with a slight cooling in the U.K.'s factory sector, which has been hit by concerns that the conflict in Ukraine could escalate further. A report of manufacturing, released earlier this week, showed the pace of growth slowed to a 14-month low in August. Nevertheless, the advance in services was strong enough to take the composite PMI for U.K.'s private sector as a whole to its highest level since November.
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