Growth in the UK service sector hit the highest level since June 2011, prompting economists to predict economic growth to rise to 0.5 per cent for the second quarter of 2013.
New business in the sector rose at its sharpest rate in six years, and sentiment was at its highest in 14 months, according to Purchasing Managers’ Index data, which also recorded positive manufacturing and construction figures in the month.
The business activity index recorded a level of 56.9 in June, marking the sixth month of growth and the highest figure for 27 months. A score of more than 50 reflects growth while a score of less than 50 indicates a decline.
“The buoyant picture for June means the economy is on course to expand by at least 0.5 per cent in the second quarter, with more growth to come,” said Chris Williamson, chief economist at survey compilers Markit.
He added the strong figure has weakened the chance of the Bank of England’s monetary policy committee to vote for more money printing at their meeting tomorrow.
“Policymakers are likely to argue that any action could perhaps be better geared towards trying to ensure the upturn is fully sustainable, such as measures to further encourage bank lending and business investment,” he said.
The service sector includes accommodation and food services, transport, information and communications, finance and real estate.