UK services sector lifts at strongest pace in almost a year

By Dow Jones newswires

Business activity in the UK's dominant services sector expanded in August at the fastest pace in almost a year, according to a survey released on Wednesday, a sign the UK economy should expand strongly in the third quarter.

The pickup in services activity, which accounts for more than three-quarters of UK economic output, suggests Britain's economy is poised for strong growth in the third quarter after expanding at an annualized rate of 3. 4 per cent in the second.

But already two rate-setters on the nine-member Monetary Policy Committee are pushing for a rate hike to keep inflation in check, and further signs that Britain's economy is nearing its full potential may persuade others to join them in voting for an earlier-than-expected tightening in policy.

The services-sector survey follows a similar poll of construction-sector managers, which also showed rapid growth in business activity last month.

Financial information firm Markit and the Chartered Institute of Purchasing and Supply said their services-sector purchasing managers index, a gauge of activity, rose in August to 60. 5 from 59. 1 in July.

Read more here: Business Spectator


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