UK services growth stronger than expected

UK services growth stronger than expected

The Markit/CIPS Purchasing Managers’ Index (PMI) for services rose to 51.8 last month from 51.5 in January, beating forecast of 51 .

The sector’s second consecutive month above the 50 line denoting growth contrasted with a surprise contraction in UK manufacturing last month. The country’s construction sector also shrank in February.

Those surveys revived fears that Britain’s economy was heading for a third recession in four years after it shrank in the last quarter of 2012.

Economists had also predicted that a weak reading in the services sector would all but seal the case for the Bank of England to announce this week that it would restart its programme of government bond purchases.

“So far, the PMIs suggest that the economy will have grown by 0.1 percent in the first quarter, barely making up for any of the 0.3 percent decline seen in the final quarter of last year,” said Chris Williamson, Markit’s chief economist.

“However, growth could turn out stronger than this as there’s good reason to believe that at least some of the weakness in manufacturing and construction was due to business being disrupted by bad weather, meaning a brighter picture may emerge in March.”

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