Services strengthen but job market growth eases
Wednesday 06 April 2011
The service sector booked its fastest pace of growth in more than a year last month, although the uncertain outlook for the economy was underlined by a separate report today suggesting the jobs market is stalling.
The indicators came as the Organisation for Economic Co-operation and Development (OECD) lowered its second-quarter growth estimate for the UK from 1.3 to 1 per cent, forecasting that, save for earthquake-hit Japan, the UK economy would lag behind its G7 peers in the three months to the end of June.
On a more positive note, the Markit/Cips services purchasing managers' index, a widely followed gauge of activity in the UK's dominant sector, climbed to a 13-month high of 57.1 in March, up from 52.6 in February. Based on last month's figures, Markit estimated the economy grew 0.8 per cent over the first quarter.
Although signs of a bounceback in growth could fuel expectations of an imminent interest rate rise, economists predicted the Bank of England would not act at this month's meeting, which starts today.
Howard Archer, at IHS Global Insight, said: "We suspect that the Bank of England will treat the markedly stronger March services survey with some caution, as other surveys on the sector are less buoyant, including the reports by their own regional agents. Furthermore, there are mounting concerns that consumers are reining in their spending markedly, which is particularly worrying for growth prospects."
Markit's Paul Smith warned that fading confidence and rising costs raised doubts over whether March's growth could be sustained."Service providers remain very cautious about expanding headcounts in the face of economic headwinds," he added. These were underscored by this morning's REC/KPMG report on jobs, which showed the rate of expansion in permanent staff placements by recruitment consultancies slowed in March after hitting a 10-month high in February. The slowdown came despite the fastest rise in staff vacancies since last April. The report also revealed salary inflation for permanent posts hit its highest level in eight months in March.
- 1 This is what the one in ten British men who pay for sex need to know
- 2 Lee Evans announces retirement from comedy on The Jonathan Ross Show
- 3 These grandmas smoking weed for the first time are wonderful
- 4 Woman opens professional cuddling shop – gets 10,000 customers in first week
Jeff Fletcher dead: Britpop guitarist is decapitated by lorry in horrific traffic accident
These grandmas smoking weed for the first time are wonderful
Jimmy Ruffin dead: Motown legend, who wrote 'What Becomes of the Brokenhearted', dies aged 78
New York snowstorm: Five dead and state of emergency declared as 'wall of snow' buries Buffalo
Woman opens professional cuddling shop – gets 10,000 customers in first week
'Muslims pre-date Columbus in discovering America,' says Turkish president Erdogan
Former Tory PM Sir John Major says 'we would not have an NHS without migrants'
France 'blocks' Russian sailors from boarding a warship
G20 summit: David Cameron warns Vladimir Putin that Russia's relationship with the West is at a 'fork in the road' over Ukraine
Myleene Klass: Ed Miliband 'strikes back' by comparing UK's need for Labour's mansion tax to Hear'Say track
Coalition government has 'shifted money from poorest to better-off' through welfare cuts and tax reductions, study claims
iJobs Money & Business
£20000 - £25000 per annum + OTE £35,000: SThree: We consistently strive to be ...
£50000 - £90000 per annum + benefits: Ampersand Consulting LLP: Markit EDM (CA...
$175 - $200 per annum, Benefits: full benefits: Carlton Senior Appointments: P...
Not specified: Carlton Senior Appointments: Senior MD Financial Advisor - San ...