UK services sector returns to growth in October as business activity jumps
A bit of good news for those in the UK's dominant services sector: the sector bounced back in October, after a disappointing September.
The Markit/CIPS services business activity sector rose to 54.9 in October, above the consensus of 54.5, way above the 50 point which denotes expansion, and up from the disappointing reading of 53.3 in September. Although Markit did point out that it was still the second-weakest figure since May 2013.
Analysts weren't impressed. Samuel Tombs, chief UK economist at Pantheon Macroeconomics, pointed out that the survey remained below its 55.4 average in the third quarter, adding that the pick-up in the employment index, which rose to 56.1 in October, suggested productivity in the sector is "barely rising".
But the rise in expansion may lead to a rate rise before the end of the year if there's another rise in November, suggested Chris Williamson, Markit's chief economist.
“Bank of England governor Mark Carney has indicated that a decision on whether to raise interest rates will come into sharper relief around the turn of the year.
“The argument for policy to be tightened is further bolstered by the survey showing new orders across all three main sectors of the economy to have also risen at an increased rate in October, boding well for further solid growth of business activity in November."