Healthy UK services sector raises recovery optimism

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Healthy UK services sector raises recovery optimism

Healthy UK services sector raises recovery optimism
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Britain’s dominant services sector has recorded its strongest growth since last summer’s Olympics.

Surveys of businesses show that in April services – which account for around three-quarters of Britain’s economy – enjoyed their fourth consecutive monthly rise.

That adds to signs that the slow economic recovery may be gaining some traction

It is good news for the British government which is faced mounting criticism of its austerity programme.

Similar surveys earlier this week showed Britain’s manufacturing and construction sectors also performed better than expected last month.

The figures reinforced expectations the UK central bank, the Bank of England, will refrain from further stimulus next week, and possibly longer.

They should also help the government avoid criticism from the International Monetary Fund draws up its annual health check of Britain’s economy later this month.

Grand figures for Ireland

Ireland’s services sector expanded at its fastest rate in three months in April, aided by exports beyond the eurozone.

That is a boost for Irish growth prospects after weak manufacturing survey data. Ireland’s services sector accounts for 70 percent of GDP.

The NCB Purchasing Managers’ Index (PMI) of services sector activity rose to 55.2 from 52.3 in March, comfortably above the 50 line that separates growth from contraction.

In contrast to much of the eurozone, bailed-out Ireland’s economy has expanded for the last two years, but it contracted in the third quarter of 2012 and was flat in the fourth as weak external demand weighed on exports.