Inflation falls to its lowest helping the UK service sector to grow

Last month the services sector grew amid post-election political stability along with lower borrowing costs.

The S&P Global UK services PMI survey for August scored 53.7 compared to 52.5 in July which is a little ahead of economists’ predictions.

Tim Moore, economics director at S&P Global Market Intelligence, said “domestic political stability helped to bolster customer demand.”

He added, “The modest post-election bounce in business activity expectations faded, however, in August.

“Hopes of interest rate cuts and steady improvements in broader economic conditions helped to support confidence, but some firms cited concerns about policy uncertainty in the run up to the autumn Budget.”

Rob Wood, chief UK economist for Pantheon Macroeconomics, said last month’s data is “strong enough for the MPC (Monetary Policy Committee) to wait until November to cut interest rates again,” which is expected to fall to as low as 5%.