Economy recovering 'at rapid pace'

Growth in the dominant services sector slipped to a seven-month low last month

Growth in the dominant services sector slipped to a seven-month low last month

First published in National News © by

The UK economy continues to recover at a "rapid pace" despite growth in the dominant services sector slipping to a seven-month low last month.

The headline reading of 58.3 in the closely watched Markit/CIPS purchasing managers' index (PMI) came in below expectations but was still well ahead of the level of 50 that separates growth from contraction.

With record rainfall likely to have impacted on last month's result, business optimism about future prospects stood at its highest in four years.

This led companies to maintain their recent recruitment drives, with overall employment levels rising for the thirteenth month in a row, the survey said.

The latest report means overall growth in the sector, which represents three-quarters of the economy and has led the UK out of recession, has fallen for three months in a row. It stood at 58.8 in December.

Markit chief economist Chris Williamson said it was important to remember that growth had been exceptionally strong in previous months.

He said: "The service sector saw another month of strong growth in January, suggesting that the UK economy continues to recover at a rapid pace."

Mr Williamson added that accompanying readings from the manufacturing and construction sectors pointed to another strong quarter for GDP.

The UK expanded by 0.7% in the final quarter of the year, with economists currently predicting an annual improvement of up to 3% for 2014.

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