London, England, United Kingdom (4E) – Activity in the UK services sector rose in August at the fastest rate in nearly a year, according to results of a survey released Wednesday, an indication that the British economy will likely expand in the third quarter.
The August services purchasing managers’ index (PMI) by Markit/CIPS was at 60.5 in August, compared with 59.1 in the prior month. A reading above 50 indicates expansion, while below signals contraction.
The rise in services activity, which makes up for around three-quarters of the country’s economic output, suggests that the UK economy will expand strongly in the third quarter after expanding at 3.4 percent on annualized terms in the second quarter.
The expanding services-sector activity will reinforce the view that the Bank of England will soon raise interest rates.
Markit said the increase of activity in the sector was driven by new business. The number of workers on private-sector firms’ payrolls rose for the 20th consecutive month.