"A return to growth of the service sector in January greatly reduces the likelihood of the U.K. falling back into a "triple-dip" recession"
- Chris Williamson, chief economist at Markit
The chances that the U.K. will fall into a triple-dip recession ebbed and nation's service sector grew at the fastest pace in four months in January. According to the report by the Markit Economics and the Chartered Institute of Purchasing and Supply, a gauge of activity surged to 51.5, up from 48.9 in the prior month, reaching the highest level since September and indicating an expansion in the sector, as a reading climbed above the 50 threshold level, which separates growth from contraction. A better-than-expected improvement in the service and manufacturing sectors and a third consecutive contraction of the construction sector are sending mixed signals, however, in case the economy shrinks again in the first quarter of 2013 it will mean the U.K. will enter its third recession since 2008.
"With the manufacturing index also in expansion territory, despite bad weather having provided some disruption, it looks more likely that the U.K. will post a modestly positive GDP reading for the first quarter," said James Knightley, an economist at ING Bank NV in London.
"A return to growth of the service sector in January greatly reduces the likelihood of the U.K. falling back into a "triple-dip" recession," said Chris Williamson, chief economist at Markit.
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