- Markit
The UK's services sector recovered only slightly in March from a three-year low in February, as worries about the global economy, government spending cuts and the EU membership referendum took their toll on the British economy. The latest Markit/CIPS services PMI climbed to 53.7 last month, up from February's 52.7. Despite the monthly increase, the quarterly PMI remained the weakest since the first quarter of 2013 as new business slowed to the lowest since January 2013. Markit's survey also showed concerns over Brexit continued to derail sentiment among businesses. Services generated new business at the slowest rate since January 2013, and the readings for hiring and business expectations were among the weakest in the past three years.
Combined with readings for manufacturing and construction sectors, Markit said its service PMI pointed to a fall in quarterly economic growth in the first quarter of 2016 to 0.4%, from 0.6% in the final three months of 2015. Government forecasters predict growth to slow to 2.0 % in 2016. Even though economists now expect a slightly slower pace of economic growth this year than was seen at the end of 2015, a robust services sector and buoyant consumer spending are seen shoring up the British economy in the coming quarters.
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