UK economy to pick up despite slower services growth

Posted on: March 5th, 2012

Service firms including recruitment companies and consultancies’ confidence about the coming year have hit the highest level in twelve months following the double dip recession.

Reports from the Markit/Cips purchasing managers’ index for services, released on Monday, shows the index dropped from 56 to 53.8.

This is however well above the number of 50 which separates growth from reduction, suggesting that the UK economy will retain growth this quarter.

This suggested that the economy will expand modestly in the first quarter, provided businesses did not see a further loss in momentum in March, said Chris Williamson, chief economist at survey compiler Markit.

The British Chambers of Commerce said on Monday that Britain will avoid a recession and the Bank of England will not need to inject anymore stimulus, but the recovery will be weak and the government should step up its efforts to boost growth.

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