Growth in Britain's services sector was the slowest in nine months in March, missing forecasts but doing nothing to change expectations that economic recovery was sustained in first quarter overall.
It was the fifth month in a row of slowing growth in the powerhouse of the economy, which accounts for about three quarters of gross domestic product.
The headline index of the Markit/CIPS services PMI fell to 57.6 in March from 58.2 in February. Economists had expected little change with a forecast of 58.1.
Despite the fall, the survey suggested the sector was still growing strongly in the UK, with anything above the 50 mark indicating expansion.
Chris Williamson, chief economist at Markit, said that, taken together with equivalent surveys from the manufacturing and constructions sectors published earlier in the week, the economy appeared to be on course for a sustained recovery in the first quarter.
"While March saw growth slow across the services, manufacturing and construction sectors, all three continue to expand at very strong rates, meaning the economy looks to have grown by at least 0.7% again in the first quarter," he said.
Williamson did however warn there was some reason for caution: "Policymakers will be concerned that growth could ease further if sterling continues to appreciate, but there's no evidence to suggest that any slowdown will be anything other than modest, adding to indications that the UK is set to see growth outpace its peers in 2014."
The Bank of England is expected to leave interest rates on hold at an all-time low of 0.5% until spring 2015, although governor Mark Carney said on Thursday that a rise could not be ruled out before next year's election.
Pressure to increase rates earlier has eased in recent weeks amid falling inflation, which is below the Bank's 2% target at 1.7%. The rate of growth in employment, new business, and business expectations all slipped in the services sector in March according to the PMI, but remained firmly above the 50 mark.
theguardian.com
It was the fifth month in a row of slowing growth in the powerhouse of the economy, which accounts for about three quarters of gross domestic product.
The headline index of the Markit/CIPS services PMI fell to 57.6 in March from 58.2 in February. Economists had expected little change with a forecast of 58.1.
Despite the fall, the survey suggested the sector was still growing strongly in the UK, with anything above the 50 mark indicating expansion.
Chris Williamson, chief economist at Markit, said that, taken together with equivalent surveys from the manufacturing and constructions sectors published earlier in the week, the economy appeared to be on course for a sustained recovery in the first quarter.
"While March saw growth slow across the services, manufacturing and construction sectors, all three continue to expand at very strong rates, meaning the economy looks to have grown by at least 0.7% again in the first quarter," he said.
Williamson did however warn there was some reason for caution: "Policymakers will be concerned that growth could ease further if sterling continues to appreciate, but there's no evidence to suggest that any slowdown will be anything other than modest, adding to indications that the UK is set to see growth outpace its peers in 2014."
The Bank of England is expected to leave interest rates on hold at an all-time low of 0.5% until spring 2015, although governor Mark Carney said on Thursday that a rise could not be ruled out before next year's election.
Pressure to increase rates earlier has eased in recent weeks amid falling inflation, which is below the Bank's 2% target at 1.7%. The rate of growth in employment, new business, and business expectations all slipped in the services sector in March according to the PMI, but remained firmly above the 50 mark.
theguardian.com
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