U.K. Services Expand for 14th Month as Confidence Increases
U.K. services expanded for a 14th month in February as an index of employment rose and confidence increased to the highest level since September 2009.
A Purchasing Managers’ Index (PMITSUK) was 58.2 compared with 58.3 in January, Markit Economics said in an e-mailed statement in London today. The median estimate of 30 economists in a Bloomberg News survey was for a reading of 58. A level above 50 indicates expansion.
Manufacturing and construction both grew in February and Markit said today that those reports, combined with today’s services reading, indicate the economy is expanding at a pace of about 0.7 percent in the first quarter. Bank of England officials begin their two-day monthly policy meeting today and will probably leave their key rate at a record-low 0.5 percent as they focus on sustaining the recovery.
“The U.K. service sector maintained the lengthening trend of consistent growth and all the signs are this is set to continue, with confidence at a four-and-a-half year high,” said David Noble, chief executive officer of the Chartered Institute of Purchasing & Supply. “Coupled with strong manufacturing and construction results, it seems all the fundamentals are in place to deliver further economic growth.”
The pound strengthened the most in a week versus the euro. Sterling gained 0.2 percent to 82.30 pence per euro at 10 a.m. London time, the biggest increase since Feb. 26. The U.K. currency rose 0.1 percent to $1.6687.
In the euro area, services output expanded faster than initially estimated in February as Germany boosted growth to the strongest in almost three years. Markit’s index for the region rose to 52.6, compared with a provisional reading of 51.7. The gauge was 51.6 in January. A composite index of manufacturing and services increased to 53.3.
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