(RTTNews) - UK’s service sector activity expanded more than expected in October and the growth was the strongest in over two years, a closely watched survey showed Wednesday.

The CIPS/Markit Purchasing Managers’ Index for the service sector rose to 56.9 in October from 55.3 in September, a monthly survey from the Markit Economics revealed. The index stood above the expected reading of 55.5 and its long-term series average. A reading above 50 suggests expansion in the service sector, while a reading below 50 indicates contraction.

New business rose in October for the fifth time in last six months and respondents attributed growth to higher market demand. On the prices front, output charges continued to be reduced despite another round of input cost increases. October’s survey found another decline in work outstanding. The latest fall was only modest and the weakest in nineteen months.

Further, service providers remained confident in the outlook for the services economy. However, the overall level of confidence was lower than September’s twenty-nine month high.

David Noble, Chief Executive Officer at the Chartered Institute of Purchasing & Supply said, “The service sector is pulling the UK economy out of recession as its own recovery accelerates. Not only have we seen the sector expand for six consecutive months, but the latest growth was the strongest recorded in over two years.”

ING economist James Knightley said, “Admittedly other surveys are not pointing to as strong activity as the services PMI, but they are at least pointing towards expansion.” According to Knightley, a small majority at the Bank of England will vote to pump in an extra GBP 50 billion into the economy.

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Posted in Categories: Economy, Releases, Stocks, UK.

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