Ash cloud and election dent services growth

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The Independent Online

Service sector activity slowed unexpectedly in April after a volcanic ash cloud that grounded air traffic hit transport firms and uncertainty about the national election dented confidence.

The Markit/Cips services PMI index fell to 55.3 in April from 56.5 in March – the weakest since January, when unusually harsh weather brought much of Britain to a standstill.

April's slowdown reflected a two-point decline in the new business index, but firms continued to take on new staff, with the employment index rising to a two-year high of 51.8.

"An easing in the rate of expansion compared to March will raise some concerns about the durability of the upturn, but survey respondents commonly reported that the volcanic ash cloud, the timing of Easter and the general election were the cause of slower growth," said Markit's Paul Smith.