Britain’s large services sector – everything from restaurants to banking – surprised economists picking up more strongly than expected last month.
The sector, which accounts for about 80% of the economy, has seen many companies working at capacity with order books.
The services index, compiled by IHS, Markit/CIPS Purchasing Managers’ Index (PMI) rose to 54.3 in August from 53.5 in July.
But the companies said Brexit concerned about the slowdown of investment for the year to come.
The figures were better than any of those provided by economists in a poll by Reuters at the beginning of this month.
IHS, Markit chief economist, Chris Williamson, said: “faster service in the industry book and job growth… highlights the extent to which the economy has become more reliant on services to support growth, and in particular, above all, a strong financial service sector.”
The numbers also for the slowdown of the growth in production that have shown up in the PMI figures for the month of August released at the beginning of this weak and was caused by a strong contraction of exports.
The manufacturing index was at 52.8, the lowest reading in 25 months.
Any reading below 50 means that economic activity is declining.
The SME’s forecast that the economy will grow 0.4% in the third quarter of the year, as in the second quarter. During the second quarter of the year, has received a boost from the World Cup celebrations and the warm, according to the Office of National Statistics.
However, there were fears of a rise in interest rates, the uncertainty about Brexit and the threat of a global trade war could reduce the growth.Relatively robust
Commenting on the services of figures, Mr. Williamson, said: “[This is] a relatively robust and resistant rate of expansion that will no doubt draw some sighs of relief at the Bank of England, after the rise in interest rates at the beginning of the month,”
“Given the increasingly unbalanced nature of growth and obscuring the business mood, the risks to the immediate outlook seem to be oriented toward the bottom.”
The survey found that companies were still taking on staff, but that the confidence for next year has slipped to its lowest since March, with the companies saying Brexit uncertainty had made customers less willing to invest in it, for now.
There are signs that the labor shortage is driving some salaries. The companies in the PMI survey reported paying higher salaries to recruit difficult to find staff and reduce the staff turnover that was to limit their ability to complete some projects.
Government figures from the ONS show the salaries, allowances, grew by 2.7% in the three months to June, compared with a year ago, while the official level of inflation, as measured by the Consumer Price Index, is 2.5%.