The UK service sector has grown massively according to the closely-watched Markit/CIPS purchasing managers’ index .
The UK services industry, which includes financial services through to cafes and shops, accounts for about 80 per cent of the UK economy.
Firms linked positive output expectations over the next 12 months to export opportunities, reduced uncertainty, stable markets, product launches, expansion plans and a recovery in the energy sector. The pound rose sharply after the report was released, jumping 0.6 per cent against the dollar to $1.336.
These stats may help you figure out why we don’t need to worry so much about a recession anymore:
1. The index rose from 47.4 in July to 52.9 in August. A score above 50 indicates expansion.
2. The month-on-month gain in the index, at 5.5 points, was the largest observed over the 20-year survey history, following a record drop of 4.9 points in July. The rate of expansion in the latest period was the fastest since May, but weaker than the long-run survey average.
3. Input price inflation accelerated to a 33-month record in August, linked to the weak pound and rising fuel and labour costs. Subsequently, service providers raised their own prices at the sharpest rate since January 2014.
David Noble, Group Chief Executive Officer at the Chartered Institute of Procurement & Supply said: “Staffing levels rose marginally, after July’s stagnation, where 14 per cent of companies increased employment levels to meet the needs of long-term investments, new business and new product launches. The weaker pound was a catalyst for more companies to raise their charges, resulting in the strongest output price inflation since January 2014. Increased costs were also attributed to new demands for services and pressures on labour costs from the Living Wage”.