LONDON (Reuters) – Activity in Britain’s services sector rose in November after three months of decline, a survey showed on Tuesday, but prices rose, which could revive concerns about inflation.
The final S&P Global/CIPS Services PMI rose to 50.9 from 49.5 in October, above the threshold of 50 that separates growth from contraction, and above an initial estimate of 50.5 for the month of November.
The final indicator of service sector production reached its highest level since July, when it stood at 51.5.
The companies surveyed also reported a faster pace of price growth since July, although inflation remained much lower than in the first half of the year.
“November data calls for caution on the short-term inflation outlook, as service companies cited strong pressures on production costs, largely due to rising staff salaries,” underlines Tim Moore, economic director at S&P Global Market Intelligence.
Some companies said these strong cost pressures had led to a hiring freeze.
However, overall employment in the services sector improved, with the employment index reaching 50.3 last month, compared to 49.2 in October and 47.9 in September, its lowest level in almost three years.
The composite PMI, which combines services and manufacturing, rose to 50.7 from 48.7 in October, above the 50.0 threshold for the first time since July.
(Written by Suban Abdulla, Corentin Chappron, edited by Kate Entringer)
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