Sound bites: UK services grow at fastest pace for 5 months

Maybe a small glimmer of hope showing through for the UK services sector amidst deepening gloom for the UK economy. Britain’s service sector showed a little more bounce in February, with the services PMI index expanding at its fastest pace in five months. The non-manufacturing PMI edged up to 51.8 from 51.5 in January. Taking into consideration the sharp dip in the manufacturing economy last month underlines that the UK economy is still in trouble. It is far too tenuous to suggest, taking the two PMI components together, that there was some uplift in activity in the first quarter. The upward movement in the UK services index in February is far too insignificant to offset the strong forces of recession taking a grip in the UK. Rising unemployment worries, the squeeze on real incomes, falling consumer confidence, deepening fiscal austerity and the weak global economic backdrop underline the deep-set problems for the UK ahead. The first quarter GDP numbers will be in negative territory and should confirm the UK economy is back in its third recession in the space of five years.The onus remains heavily on the Bank of England to deliver more quantitative easing ahead, with the first opportunity for the next tranche to come through at this week's Monetary Policy Committee

Highlights

                                             FEB   JAN          DEC   F'CAST
Services headline index       51.8   51.5         48.9     51.0
Business expectations         67.6   67.2         64.0