UK services growth ‘picks up speed’

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Growth across the UK’s services sector was at its fastest in four months in November, according to the latest Markit purchasing managers’ index.

The index rose to 55.9 last month from 54.9 in October, putting the figure well above the 50 mark that separates expansion from contraction.

The data offsets weaker PMI manufacturing and construction surveys published earlier this week.

Markit’s composite PMI, combining all the data, was steady at 55.7.

But this was still its highest reading since July.

Markit’s chief economist Chris Williamson said: “A welcome upturn in service sector expansion helped counter slower growth in manufacturing and construction in November, suggesting the UK continues to enjoy the ‘Goldilocks’ scenario of solid economic growth and low inflation.

“The rate of job creation remained resiliently robust in November despite widespread difficulties finding suitable staff and worries about the introduction of the National Living Wage, in turn leading to reports of rising wages.

“For now, falling oil and energy costs are offsetting rising wage growth and keeping a lid on inflationary pressures, but the upturn in earnings growth raises question marks over just how long inflation, and therefore interest rates, will remain low.”

Mr Williamson said that, taken together, the three PMI surveys indicated that the UK’s economy would grow by 0.6% in the fourth quarter of the year, up from 0.5% in the three months to September.

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