Growth in the UK's three main sectors suggests the economy will 0.5 per cent in the fourth quarter, against Bank of England expectations of 0.4 per cent, new figures have suggested.
The purchasing managers' index for the services sector, published today by Markit, grew unexpectedly fast in November, rising to 55.2 from 54.5 last month – against forecasts of 54.2. Any figure above 50 denotes growth.
Today's figure means two out of three of the UK's main sectors performed surprisingly strongly last month. Although the manufacturing sector fell to 53.4, the construction sector rose to its highest since March.
Today Markit said the rise in the services sector had been fuelled by the sharpest build-up of outstanding work since July last year.
However, the strength of long-term business sentiment weakened for the first time since July – suggesting political uncertainty and inflation are putting pressure on the sector.
“Rising prices – often linked to the weaker pound – are a big concern… and suggest that inflation is set to lift higher," said Chris Williamson, chief business economist at IHS.
"The past two months have seen the steepest rise in businesses’ costs for over five-and-a-half years. These higher costs will inevitably feed through to consumers in the form of higher prices.
"“The sustained improvement in the business surveys and sharp rise in prices suggest that the odds will continue to shift away from the Bank of England adding more stimulus.
"However, any policy tightening still seems a long way off given the uncertainty facing the UK economy. The service sector PMI data showed that business optimism about the coming year dipped in November, to the second-lowest in four years.”