Chancellor George Osborne is in for good news this morning as Britain’s service sector has grown at its fastest rate in five months, and UK retail sales at their fastest rate for more than three years.
February’s UK services Production Manufacturers Index (PMI) shows the fastest growth since last September at a rate of 51.8, up from January’s 51.5.
Judging from the PMI, it looks like the economy could enjoy 0.1% growth in Q1 (the first three months of 2013). However, experts have warned that it isn’t all good news.
“So far, the PMIs suggest that the economy will have grown by 0.1% in the first quarter, barely making up for any of the 0.3% decline seen in the final quarter of last year,” said Chris Williamson, chief economist at Markit, which compiles the PMI data.
“However, growth could turn out stronger than this as there’s good reason to believe that at least some of the weakness in manufacturing and construction was due to business being disrupted by bad weather, meaning a brighter picture may emerge in March.”
This comes as UK retail sales have grown at their fastest rate since December 2009. According to the British Retail Consortium (BRC), like-for-like retail sales were up 2.7% over last year.
BRC director-general Helen Dickinson said: “February saw growth across all parts of retailing, with big-ticket goods and items for the home recovering particularly well.”
However, the BRC figures jar with findings by a separate survey from the Confederation of British Industry suggesting that retail figures grew at their slowest pace in months.
Twitter reactions to the latest PMI figures