UK services hit highest growth rate since 1997

The UK’s services industry is growing faster than forecast, supported by strong increases in levels of new work, employment and backlogs of work.

The business activity index recorded the fastest rate of growth since May 1997, reaching 62.5 in October, exceeding expectations of 60.3, up from 60.2 in September.

The survey company, Markit, said: “Service sector activity has risen continuously throughout 2013 to date and generally at an accelerated rate. This has largely been the result of rising levels of incoming new business placed with service providers as market sentiment has improved in line with a strengthened economic climate.”

Chris Williamson, chief economist at Markit, said: “The UK economic recovery moved up a gear again in October, with the PMIs indicating record growth of output and employment. The all-sector PMI, measuring business activity across the UK private sector economy, hit an all-time high of 61.5 in October, up from 60.2 in September.

“Historical comparisons of the PMI against gross domestic product suggest the latest survey data are consistent with a 1.3% quarterly rate of GDP growth, up sharply from previous quarters. The surveys also indicate that the rate of private sector job creation is currently running in excess of 100,000 per quarter.”

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