LONDON (Reuters) – Activity in Britain’s services sector accelerated again in December, suggesting the economy could narrowly avoid recession, according to a survey released on Friday.
The S&P Global/CIPS UK composite PMI, which includes the services and manufacturing sectors, rose to 51.7 in December, its highest level in six months, from 50.7 in November, and a consensus of 50 ,9.
“The UK economy continues to escape recession, with growth picking up some strength towards the end of the year, suggesting that GDP stagnated during the fourth quarter,” said Chris Williamson, chief economist. from S&P Global Market Intelligence.
“The economy is, however, two-speed, with the manufacturing sector having contracted sharply, while services have regained a certain balance.”
The services sector PMI rose from 50.9 to 52.7, the highest reading since June. This is the second time since July that the index has been above the growth threshold of 50.
However, the manufacturing index fell to 46.4, its 17th consecutive month of contraction.
Strong growth in new orders in services offset the decline in orders in the manufacturing sector, and overall new orders are now showing growth for the first time in six months.
However, the employment index fell for the fourth consecutive month.
The survey brought some relief to the Bank of England, as service price inflation, which the central bank monitors closely, is slowing.
The sector’s producer price index fell from 58.2 to 57.7, but remains high by historical standards.
(Written by William Schomberg, Corentin Chappron, edited by Jean-Stéphane Brosse)
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