UK Services Rise in December to 17 Month High

Britain’s services sector grew at the fastest pace for 17 months in December, according to a survey that has raised hopes for a strong end to 2016 for the economy.

There was also a pick-up in new business and job creation, according to the poll of firms from the UK’s biggest sector, which includes banks, hotels and transport. But news that companies increased their prices at the fastest pace for more than five years will intensify worries over the weak pound stoking inflation in the months ahead and raises the prospect of interest rates going up this year.

The main reading on the closely watched Markit/CIPS UK Services PMI (pdf) confounded economists’ expectations of a slowdown. It increased for the third month running to 56.2 from 55.2 in November and signalled the fastest growth for the dominant services sector since July 2015. Economists had forecast 54.7 in a Reuters poll.

It was the fifth month running that the index was above the 50 mark, which separates growth from contraction, having briefly plunged below it in the wake of June’s referendum on EU membership.

via The Guardian

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