New orders boost UK service sector

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Activity in the UK’s dominant services sector grew at the fastest pace for six months in October, helped by rising order books and the “resilience” of the application.

The Markit/CIPS purchasing managers’ index (PMI) for services rose to 55.6, up from 53.6 in September, well above the threshold of 50 that indicates growth.

The services sector, which represents the core of the UK economy, saw new orders grow at the fastest rate since the month of May.

However, new jobs have been cut due to the uncertainty on the long-term demand.

The better than expected reading for the services following a strong October for the manufacturing as well as a return to growth for the construction industry, last month.

Ruth Gregory, UK economist at Capital Economics, said the data suggest that quarterly GDP growth is running at about 0.5%, above the 0.4% recorded in the third quarter.

The book has slightly risen compared to the dollar and the euro, of $1.30620 and €1.12140 respectively.

Chris Williamson, chief economist at IHS Markit, which compiles the survey, said: “The latest PMI surveys bring mixed news on the economy.”

He said: “While the recovery of the activity of the growth companies adds a certain justification to the Bank of England’s decision to raise interest rates, for the first time in a decade, more deeply into the figures highlights the fragility of the economy and points to downside risks to the outlook.”