Services sector lift off points to 'escape velocity' for UK economy

4 August 2013

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5 August 2013 | Paul Snell

The UK services sector continued to grow in July, expanding at its fastest rate since November 2006.

According to the Markit/CIPS Purchasing Managers’ Index, where a reading above 50 indicates growth, the sector recorded 60.2 last month, compared with 56.9 in June.

The strong performance was attributed to higher demand and the improving economy at home and abroad. Good weather and an improving housing market were also said to be factors. Outstanding work was at its highest level since February 2000, with employment also rising for the seventh consecutive month. Input prices and output charge also rose.

Paul Smith, senior economist at Markit, said: “Although an early call on one month’s data, the forward-looking elements from the survey point to a further strengthening of GDP in Q3 as the UK heads towards ‘escape velocity’ and self-sustaining economic expansion.”

David Noble, CEO at CIPS, said: “Business confidence for UK services is now the highest it has been for 15 months, allowing businesses to expand, develop new products and increase their fees.”

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