The UK services sector grew at its fastest pace for eight months in April, calming fears that the UK recovery had slowed after a tough first quarter.
The purchasing managers’ index (PMI) reading for the sector, which dominates the UK economy, was 59.5, beating the consensus expectation of 58.5. Any reading above 50 indicates an expansion of the sector.
The Markit survey found the sector expanded at its fastest pace since August 2014 and activity in the sector has now risen for 28 consecutve months.
The Markit report also sounded an upbeat note on the outlook for UK services, saying “service providers remained strongly optimistic about output expectations over the next 12 months.”
However, it added: “Sentiment eased slightly since March, linked to uncertainty surrounding the forthcoming election, but remained strong overall.”
Vicky Redwood, chief UK economist at Capital Economics, said the service sector data would “allay fears of a renewed slowdown in the economy following the deterioration in the manufacturing and construction surveys already released”.
She said judging from the PMI data released since the end of the first quarter, economic growth should rebound from the 0.3 per cent seen in the first three months of the year, possibly hitting 0.8 per cent in the second quarter.
