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Business activity in the UK’s service sector edged further into growth territory in December, helping stabilise the country’s economy, according to preliminary survey data on Tuesday.
The S&P Global/CIPS flash UK flash composite purchasing managers’ index rose to 51.7 points in December from 50.7 in November. The reading came in better than expected, with FXStreet consensus expecting the reading to come in at 50.9 points.
S&P noted that this pointed to the fastest rise in private sector business activity since June.
The flash services PMI business activity index climbed to 52.7 from 50.9. FXStreet were expecting the reading to come in at 51.0.
Meanwhile, the flash manufacturing PMI fells to 46.4, behind consensus of 47.5 and November’s reading of 47.2.
Looking ahead, S&P said the degree of positive sentiment regarding the year ahead outlook for business activity edged up to its highest since September.
‘The UK economy continues to dodge recession, with growth picking up some momentum at the end of the year to suggest that GDP stagnated over the fourth quarter as a whole. While employment meanwhile fell for a fourth month, the decline was only marginal and not indicative of any material rise in unemployment,’ said Chris Williamson, chief business economist at S&P Global.
‘This is, however, a dual-speed economy, with manufacturing contracting sharply while services regained some poise, the latter growing faster in December thanks in part to financial services activity being buoyed by hopes of lower interest rates in 2024.’
The flash PMIs are compiled by S&P Global from responses to surveys sent out to around 650 manufacturers and 650 service providers in the UK. Responses are collected in the second half of the month.
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