Figures for the UK service sector released this week show an unexpected growth in January, offering more than a glimmer of hope over the extent of the predicted slowdown.
The official figure issued by the Chartered Institute of Purchasing and Supply, showed the index had risen for the second consecutive month. The index stood at 52.4 in December and rose to 52.5 for January. Any reading above 50 on the activity index shows a growth in that sector.
The Service sector makes up almost 75% of the UK economy.
While business expectations are currently at their lowest level for some years, the activity in the service sector shows that clearly business is not collapsing, and offers a more upbeat outlook, against the more prevalent “doom and gloom” predictions.
While experts expect the Bank of England to reduce interest rates imminently, to curtail the fears of an economic slowdown, it is believed that a calculated and measured drop in rates over the coming months, may actually help control the economy through the slowdown.
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