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Business News

UK services industry expands to reach eight-month high


Activity in the dominant services industry accelerated in July, according to the latest major survey of the sector, posting the quickest rate of expansion since last November.

The Markit/CIPs Purchasing Managers’ Index for services climbed to 59.1, up from 57.7 previously, with any reading above 50 indicating growth.

“The domestic economy clearly continued to boom in July,” said Chris Williamson, chief economist at Markit. Samuel Tombs of Capital Economics said the survey data “provides reassurance that the recovery is not losing pace”.

The strong reading, higher than analysts’ expectations, pushed sterling up a third of a cent against the dollar to €1.6887 as traders’ expectations of an early rate rise from the Bank of England strengthened.

However, the survey also suggested that output prices barely rose in the month, which suggests inflationary pressure is not building.

There was also a jump in the equivalent survey of services in the eurozone, which increased to 54.2 in July, up from 52.8 in June.