Recession risk eases as service sector grows
Britain's dominant services sector grew at the fastest pace in 10 months in January and firms became much more optimistic, a survey showed on Friday, crowning a raft of upbeat economic news this week that raised hopes Britain may avoid recession.
The surprise rebound provides some relief to the government - under pressure again to ease its austerity drive - as well as food for thought for the Bank of England as it considers whether to pump more money into the fragile economy.
The central bank is still widely expected to announce another round of quantitative easing asset purchases next week, though the policymakers may now lean towards a smaller boost.
The Markit/CIPS Purchasing Managers' Index (PMI) for services rose to 56.0 from 54.0 in December, confounding forecasts for a dip and climbing higher above the 50 mark which separates growth from contraction.
"Given all the concerns about the weakness of activity in Q4, the prospect of a double-dip recession, I think those fears now appear to be dispelled to a large extent," said Commerzbank economist Peter Dixon.
The improvement in services follows PMI releases showing that manufacturing unexpectedly returned to growth last month, while construction firms became more upbeat despite a slower expansion in activity. ...Read more
Source: Olesya Dmitracova | Reuters | www.uk.reuters.com/
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