Service sector growth welcomed
1:24pm Thursday 7th June 2012 in Business News
A run of dire economic data that has spooked the UK's recovery hopes was halted today with a decent performance by the powerhouse services sector.
The Markit/CIPS survey for overall services activity, in which a reading above 50 represents growth, came in at 53.3 in May, unchanged from April and its 17th month of growth in a row.
The healthy figure follows data revealing a deeper-than-previously-estimated recession, a plunge in manufacturing activity and the worst retail sales in nearly two-and-a-half years.
Howard Archer, chief UK economist at IHS Global Insight, said: "Given the dominant role of the services sector in the economy, the steady growth in May reported by the purchasing managers is welcome news and supports hopes that it can avoid further contraction in the second quarter."
The services sector, which makes up around 75% of the total economy, was boosted by a rise in incoming new business, which hit a four-month peak, driven by increased marketing, Markit said.
The survey was seen as a key factor in today's deliberations by Bank of England policymakers on whether to boost stimulus measures for the UK economy.