UK Services Output Growth Slows But Outlook Strong

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The FINANCIAL — Activity in the U.K.'s dominant services sector expanded again in February, a further indication that the U.K. may avoid a return to recession in the first quarter, but growth was at its slowest since November as new business and output eased from more buoyant levels in January, survey data showed Monday.

 

According to Borsa Italiana – London Stock Exchange Group, nonetheless, business expectations rose to the highest level in 12 months, with firms citing an improved economic climate and indications of a further pickup in new orders, according to a survey by data analyst firm Markit and the Chartered Institute of Purchasing & Supply.

The services Purchasing Managers' Index slipped to 53.8 in February from 56.0 in January.

That was weaker than the 55.0 expected by economists surveyed by Dow Jones Newswires last week.

A reading above 50.0 indicates the sector is expanding, while a reading below 50.0 indicates it is contracting.

"Despite seeing some loss of momentum in February, the service sector continued to grow at a robust pace, adding to signs that a double-dip recession will be avoided," said Chris Williamson, chief economist at Markit.

"The outlook in fact seems to have brightened, with business confidence about the year ahead hitting a 12- month high and firms again taking on more staff in February," he said.

 

 

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