Britain's services output growth dips in January
- Author: Eleanor Harrison Feb 06, 2018,
Feb 06, 2018, 13:38
The sector drew a reading of 53 in January, down from 54.2 in December and lower than the expected 54.3, according to IHS Markit's latest purchasing managers index (PMI).
A reading above 50 indicates economic expansion, while a reading below 50 points toward contraction.
Last Friday, IHS Markit said Malaysia's manufacturing conditions improved in January 2018, albeit only marginally, mainly driven by a renewed rise in new business.
The PMI survey produced a reading of 53 in January, against a reading of 54.2 in December.
Recent strong economic data boosted hopes that the Bank of England (BoE) would be pressured into raising interest rates again in the near-term, but this month's trio of below-forecast PMIs has derailed upbeat hopes for the United Kingdom economy and softened the chances of interest rate hikes this year. Combined with the data on the manufacturing and construction sector that were worse than expected last week, the results on activity in the service sector show that the sixth largest economy in the world is growing at the slowest pace since the Brexit vote.
"The composite PMI continues to signal a bullish outlook for GDP growth in the Eurozone", Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics said in an email.
Of the new work that businesses were able to attract in January, growth was chalked up to 'successful marketing campaigns, ' greater market shares and new services offerings.
Hiring continued at a robust pace, suggesting a positive pipeline of new projects and positive output expectations, Markit said.
The Bank raised rates from 0.25 per cent to 0.5 per cent last November in response to what it described as building underlying inflationary pressures, the first hike in the United Kingdom cost of borrowing for a decade.
Business confidence was the highest since March 2017.
"[The data] strengthen the case for the Bank to take a lengthy pause before raising interest rates again; we see the next hike coming in August".