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Published: Sat, February 04, 2017
Economy | By Melissa Porter

Markit: UK services PMI falls for first time in four months

Markit: UK services PMI falls for first time in four months

The Nikkei India Services Purchasing Managers' Index, or PMI, clocked in at 48.7 in January, above December's reading of 46.8.

Employment in the United Kingdom service sector rose for the sixth consecutive month in January. A January 24 estimate was for a 54.3 reading.

IHS Markit said its survey points to a quarterly growth rate of 0.4 percent and that it anticipates further "robust" growth over the year, not least because of the improving jobs backdrop.

Food companies have blamed higher costs for imported ingredients as they raise prices in the shops on goods such as Marmite, Cadbury's Freddo bars and Weetabix.

While private-sector growth slowed somewhat in Germany, Italy and Spain last month, the recent recovery in France gathered momentum, Markit said.

The survey's sub index for profitability remains in positive territory, albeit the rate of expansion here eased to the weakest seen in the current three-month sequence of growth.

Markit: UK services PMI falls for first time in four months
Markit: UK services PMI falls for first time in four months

The new business sub-index climbed to 54.3 last month from 54.1, its highest reading since November 2015.

Markit's analysis shows the reading translating to a rise in GDP of 0.4 per cent over the quarter.

According to IHS Markit, input cost inflation accelerated again in January, taking the rate of increase to its highest since March 2012.

On Thursday, the Bank of England revised up its forecast for the United Kingdom economy this year, and now expects it to grow by 2%.

There was a slowdown in employment growth to the lowest level for five months as companies responded to a slightly lower flow of new orders.

Strong pressure on costs led firms to increase their charges in January, at a pace unchanged from December's 68-month record, the PMI report said. It therefore covers about half the economy, whereas official data on services published with more of a lag covers nearly 80%.

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