SERVICE SECTOR SOARS

The latest Markit/CIPS services purchasing managers’ index (PMI) reports strong growth in the UK services sector, which currently represents 70% of the UK economy and which has driven the recent improvement in sentiment.

 Their July index was recorded at 59.1, up from the 57.7 recorded in June. Given that any score above 50 represents expansion, this is very good news for the economy as a whole.

Further encouraging news also came from the construction sector where, driven by an increase in home building to its highest level for 11 years, their index was recorded at 62.4.

At these levels, it is encouraging for the July-September quarter, where its is expected that the country’s Gross Domestic Product (GDP) will match the 0.8% growth achieved in both the first and the second quarter of 2014, should this positive tr end continue.

Commenting on these findings, Chris Williamson, Markit’s Chief Economist, said: “The July PMI showed the sector expanding at the fastest pace since November, as demand for services continued to increase at a rate rarely seen in the survey’s 18-year history.”