LONDON: UK services growth eased in July, indicating the economy lost some momentum at the start of the third quarter.
An index of services, the largest part of the economy, fell to 57.4 from 58.5 in June, Markit Economics said. That’s below the median forecast of economists in a Bloomberg survey for a reading of 58.
The report comes as Bank of England officials hold their latest interest-rate meeting in London, with some policy makers expected to push for an increase in borrowing costs. Markit said the services index, along with its manufacturing and construction gauges, indicate the economy grew at a “still-impressive” 0.6 percent at the start of the third quarter.
Growth in services last month was led by the finance industry, which had its best performance since 2013, according to Markit. Total new business rose for a 31st month in July, though employment growth cooled.
The pace of expansion “will do little to deter hawks at the Bank of England from voting for higher interest rates,” said Chris Williamson, Markit’s London-based chief economist. “However, the majority of MPC members will most likely see no need to rush into hiking rates any time soon” because of “recent signs of cooling economic growth.”
The British Chambers of Commerce said this week that the service sector “holds the key to unleashing the export potential of the U.K.” A BCC survey of more than 1,200 service sector firms showed that almost 60 percent don’t export at all.
