Partly Cloudy

Partly Cloudy

max temp: 13°C

min temp: 7°C

ESTD 1874 Search

UK: Services lift raises rates pressure

16:00 05 August 2014

Group of people in queue at bank. Growth in the services sector has slowed, according to the CBI.

Group of people in queue at bank. Growth in the services sector has slowed, according to the CBI.

(c) Ryan McVay

Another strong performance by Britain’s powerful services sector has stepped up the pressure on policymakers to consider a rise in interest rates.

shares

The Markit/CIPS services purchasing managers’ index (PMI) registered 59.1 last month, up from 57.7 in June and well above the measure of 50 which indicates growth.

Economists said the highest reading for the sector since November indicated that GDP growth will at least reach 0.8% in the third quarter of this year.

It is also expected to increase the chances that the Bank of England’s monetary policy committee (MPC) will decide to raise interest rates before the end of the year.

Policymakers are meeting this week amid speculation that their discussions may produce a split vote for the first time since July 2011.

Markit chief economist Chris Williamson said: “The sustained strength of growth will add to calls for interest rates to start rising later this year.

“However, with prices charged for services rising only very modestly again in July, an absence of inflationary pressures means there is still a strong case for any tightening of policy to be delayed until 2015.”

Today’s report follows a strong construction sector reading, although manufacturing figures last week were disappointing as firms struggled with the strong pound and weaker demand in key export markets.

The services report found that more staff were recruited to help firms keep on top of current workloads and in anticipation of further growth in the coming months.

Taken across all three CIPS surveys, the rate of job creation eased from June’s all-time high but remained consistent, with approximately 100,000 jobs being created by the private sector in July.

Mr Williamson said this meant that the unemployment rate should fall below 6% by the end of the year, compared with 6.5% in the three months to May.

The services sector, which covers everything from social work to banking, accounts for about three-quarters of the country’s economic activity.

Backlogs of work in the sector rose at a marked and accelerated pace during July, with the degree of growth the strongest since January.

shares

0 comments

Welcome , please leave your message below.

Optional - JPG files only
Optional - MP3 files only
Optional - 3GP, AVI, MOV, MPG or WMV files
Comments

Please log in to leave a comment and share your views with other East Anglian Daily Times visitors.

We enable people to post comments with the aim of encouraging open debate.

Only people who register and sign up to our terms and conditions can post comments. These terms and conditions explain our house rules and legal guidelines.

Comments are not edited by East Anglian Daily Times staff prior to publication but may be automatically filtered.

If you have a complaint about a comment please contact us by clicking on the Report This Comment button next to the comment.

Not a member yet?

Register to create your own unique East Anglian Daily Times account for free.

Signing up is free, quick and easy and offers you the chance to add comments, personalise the site with local information picked just for you, and more.

Sign up now

A large police cordon around the Tesco Extra store in Great Yarmouth.

Picture: James Bass

A Tesco Extra in Great Yarmouth was evacuated and searched by bomb disposal crews following a hoax call.

The White Horse pub in Sudbury is selling Zebra, Camel and Bison at its special steak night

While squirrel has been popping up on the menu of adventurous restaurants across Suffolk in recent months, it appears that the people of Sudbury have even more exotic tastes.

Fish and chip shop blaze in Sible Hedingham

Two people were treated for smoke inhalation after a fire at a fish and chip shop in Sible Hedingham.

Sam Smith

Tickets for Sam Smith’s highly-anticipated show at Thetford Forest sold out in less than three quarters of an hour today.

The MSC Oscar en route in the North Sea to its next port of call.

Hundreds of ship-spotters are expected to line the shore as the Port of Felixstowe welcomes the world’s largest container ship on Monday – just two months after the last holder of the title sailed into the harbour.

Tawny owl

Two men who were suspected by police of being responsible for the illegal trapping and killing of a tawny owl in west Suffolk will not be charged.

The Causeway in Hitcham

Hundreds of pounds in cash and jewellery were stolen from a home in Hitcham.

All Star Wrestling at the Corn Exchange

It might be ‘fake’ - but you can’t say it’s not fun.

Fire fighters tackle tractor blaze

Fire fighters were called to a tractor that was ablaze in a field in Pettistree.

Temporary chief constable Gareth Wilson and police and crime commissioner Tim Passmore

Suffolk Constabulary is pledging to support a national campaign aimed at promoting trust, integration and cohesion within communities.

Most read

Most commented

Topic pages