Business activity in Britain’s heavyweight service sector grew in October at the fastest pace in six months and significantly faster than anticipated, a closely-watched survey indicated Friday, likely providing some reassurance to markets after the Bank of England’s decision Thursday to raise borrowing costs for the first time in a decade.
Financial information firm IHS Markit Ltd. said its purchasing managers index for the services industry–which accounts for some 80% of the U.K. economy–rose to 55.6 in October, up from 53.6 in September, and above the expectations of analysts polled by The Wall Street Journal, who forecast a 0.2-point drop.
The 50-point mark separates expansion from contraction.
The growth in activity was supported by improved order books and resilient client demand, the survey indicated.
However, the pace of job creation slowed to a seven-month low, IHS Markit said, and sentiment about future growth prospects remained subdued amid Brexit uncertainty and concerns about business investment.
“While an upturn in business activity growth adds some justification to the Bank of England’s decision…a deeper dive into the numbers highlights the fragility of the economy and points to downside risks for the outlook,” Chris Williamson, chief business economist at IHS Markit, said.
Source: Dow Jones