UK services growth hits eight-month high
Service providers in the UK began the second quarter of 2015 on a solid footing, according to the latest PMI® survey data from Markit and CIPS. Business activity increased at the fastest rate since August 2014, driven by a further marked rise in new business. Employment growth remained strong and sentiment was at an elevated level despite some uncertainty linked to the forthcoming General Election. The survey highlighted rising pressure on margins, however, as output prices fell for the first time in six months but input prices continued to rise solidly on the back of wage pressures.
Key Points:
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Expansion of business activity accelerates further at start of second quarter
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Firms cut prices at fastest rate since February 2012
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Rate of job creation remains robust despite easing to four-month low
The headline figure for the survey is the seasonally adjusted Markit/CIPS UK Services Business Activity Index, a single-figure measure designed to track changes in total UK services activity compared with one month previously. Readings above 50.0 signal growth of activity compared with the previous month, and below 50.0 contraction. The Business Activity Index rose for the second month running in April to 59.5, from 58.9, signalling the fastest rate of service sector expansion since August 2014. Activity in the sector has now risen for 28 successive months, the longest sequence of growth in seven years. The Index remained comfortably above its long-run average of 55.2 in the latest period. Firms linked higher activity to new business wins, improving economic confidence and warm weather. To read more.....