-Chris Williamson, chief economist at Markit
Activity growth in the British services sector unexpectedly slowed last month, but still remained strong at the beginning of the year. The Markit/CIPS UK services PMI slid more than expected to 56.7, down from 57.2 in January, but stayed well above the contraction area for the 26th straight month. Services providers reported the second-fastest rate on record of staff hiring, as well as increase in wages and new orders. The jobs gauge in the services survey ticked up to 57.3 in February, the second-highest level in the Markit survey's 19-year history after a record high was reached last June. Markit also said that cost inflation rebounded from January's low, amid reports of suppliers raising prices and higher wages being paid. Business expectations also climbed to the highest level in three months, with nearly half of companies predicting an increase in activity from present levels in 12 months' time.
Following upbeat PMIs for manufacturing and construction sectors earlier this week, Markit said the data pointed to economic growth of 0.6% in the first three months of 2015, quarter-on-quarter, accelerating from 0.5% at the end of last year. A robust services sector, which makes up 78% of the total UK economic output, was the strongest upward contributor to the total GDP in the final quarter of 2014.
© Dukascopy Bank SA
© Dukascopy Bank SA