London, England, United Kingdom (4E) – Activity in the UK services sector accelerated in August and posted its strongest performance since December 2006, according to a gauge for the country’s services sector released on Wednesday.
The monthly services purchasing managers index (PMI) by Markit/Chartered Institute of Personnel & Supply (CIPS) climbed to 60.5 in August, an increase from 60.2 in July and the highest level since December 2006. The advance beats economists’ forecasts of a 59.5 decline.
A reading above 50 shows growth in the sector, while a reading below 50 indicates contraction.
The nation’s services sector expanded at its fastest rate in nearly seven years in August, a further sign that the economy is firmly bouncing back and reinforces expectations that the Bank of England will keep its policy stance in its monthly announcement set later this week, according to a survey released Wednesday.
The rise in output in the services sector, which accounts for more than two-thirds of the nation’s economy, comes after improved performance in construction and manufacturing last month reflecting the broad economic recovery.
This week, manufacturing and construction PMIs grew stronger than expected, lifting the UK’s all-sector PMI to 60.7 in August, a record high, and an increase from July’s 59.5 reading.
The economy is predicted to grow by more than 1 percent in the third quarter, according to Markit, which compiles the data along with CIPS.