UK service sector PMI rises to 56.9 in October

The British service sector in October showed strong vitality as the industry's purchasing managers index rose to 56.9, the highest level since August 2007, according to a CIPS/Markit report released Wednesday.

The report, based on a survey of about 700 service companies, showed that the figure in October was 1.6 percent higher than that of the previous month and exceeded economists' expectations of a rise to 55.5.

So far, the index has witnessed the sixth successive month above the 50-level, which separates growth from contraction. The PMI includes a package of indices such as new orders, inventory levels and production that measure economic performance.

"The service sector is pulling the U.K. economy out of recession as its own recovery accelerates," David Noble, CEO of Charted Institute of Purchasing and Supply, said in a statement.

"Given that the PMI Services survey accounts for almost 40 percent of the U.K. economy, this bodes well for wider market pickup," Noble said.

The PMI is generally considered to be a good guide to the health of the economy.

According to the CIPS/Markit report, the new business index rose for the fifth time in the past six months, though unemployment was still mounting. The index for business expectations, however, declined in October to 71.2 from the previous month's 75.

"A quick return to rapid rates of growth still looks unlikely," said Vicky Redwood, an economist at Capital Economics Ltd. "But the economy will pull out of recession before the year is out and this is unlikely to stop the Bank of England from extending its program of quantitative easing at Thursday's meeting."

Source:Xinhua