World Economy

Britain Services PMI at Ten-Month High

Britain Services PMI  at Ten-Month High
Britain Services PMI  at Ten-Month High

Businesses in Britain’s services sector grew at their fastest pace since January last month, a survey showed on Monday, and the broader economy kept up its momentum in late 2016, even if firms have some worries about the year ahead.

The Markit/CIPS services purchasing managers’ index—a closely watched gauge of the services sector—rose to 55.2 in November from 54.5 in October, beating all the forecasts in a Reuters poll of economists.

Despite a dip in the equivalent survey of manufacturers published last week, overall the November PMIs suggest the economy as a whole will maintain the third quarter’s solid 0.5% growth rate through to the end of the year, Markit said.

“The pace of UK economic growth remains resiliently robust in the fourth quarter, despite ongoing uncertainty caused by Brexit,” said Chris Williamson, chief business economist at IHS Markit, the company that compiles the survey.

Most economists and the Bank of England said Britain’s economy would slow sharply after June’s vote to leave the EU. But strong consumer demand and a boost to exporters from the heavy post-referendum fall in sterling have kept growth going.

A separate survey by manufacturing lobby EEF released earlier on Monday showed a boost in new orders and a better-than-expected recovery in output.

Last month the Bank of England revised up its forecasts to pencil in 0.4% growth for the last three months of 2016. But it also said annual growth would slow to 1.4% next year from 2.2% in 2016 as higher inflation squeezes household incomes.

Meanwhile, another report  says the UK government is planning to spend $643 billion on modernization of infrastructure of the country in order to avoid Brexit consequences. The government on Monday published a new National Infrastructure and Construction Pipeline, setting out over $643 billion worth of planned private and public investment over this parliament and beyond with more than 40% of the pipeline being delivered thanks to government investment.

It was also noted that the pipeline includes major projects such as the Thames Tideway Tunnel, the rollout of smart meters, and upgrading the A14 highway in the east of England.

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