The UK’s dominant services sector picked up speed in February, according to the latest survey snapshot, implying that the overall economy maintained its momentum in the first quarter of 2018.
The Purchasing Managers’ Index (PMI) for services came in at 54.5 in the month, up from 53 in January and outstripping City of London expectations of a 53.3 reading.
It follows disappointing February PMI readings for construction and manufacturing last week, but services account for almost 80 per cent of output, meaning it is the most significant indicator of the three.
“The PMI surveys so far collectively point to the economy growing by nearly 0.4 per cent in the first quarter to indicate that a resiliently steady pace of expansion has been maintained,” said Chris Williamson of IHS Markit, which compiles the survey.
The PMI showed cost pressures for services firms moderating to their lowest for a year and a half.
Business-to-business work was higher, but weak household budgets remained a drag, firms reported.
“It was business customers that had the confidence to forge ahead with orders, as consumers hesitated over concerns about possible rate rises impacting on their household budgets and what the future could hold,” said Duncan Brock of the Chartered Institute of Procurement and Supply, which sponsors the survey.