U.K. services growth unexpectedly accelerated to its fastest pace in more than two years in June, evidence the economic recovery is gaining strength.
A factory gauge rose to 56.9 from 54.9 in May, Markit Economics and the Chartered Institute of Purchasing and Supplysaid today in London. Economists had forecast 54.5 in June, according to the median of 33 estimates in a Bloomberg News survey. Readings above 50 indicate expansion. The pound rose after the data.
Reports this week showed manufacturing grew at the fastest in more than two years in June and construction expanded for a second month. Markit said its three indexes together point to economic growth of at least 0.5 percent in the second quarter, adding to signs of recovery just as Mark Carney leads his first Monetary Policy Committee meeting after taking over at the Bank of England.
“The U.K. services sector finished off the second quarter with a stellar performance in June, giving the clearest signal yet that the worst days of the financial crisis are behind us,”CIPS Chief Executive Officer David Noble said. The data “mark a good first week for the new Bank of England governor.”
The pound rose against dollar after the report. It was at $1.5241 as of 9:57 a.m. in London, up 0.6 percent from yesterday. The yield on the 10-year U.K. government bond dropped 4 basis points to 2.34 percent.
A factory gauge rose to 56.9 from 54.9 in May, Markit Economics and the Chartered Institute of Purchasing and Supplysaid today in London. Economists had forecast 54.5 in June, according to the median of 33 estimates in a Bloomberg News survey. Readings above 50 indicate expansion. The pound rose after the data.
Reports this week showed manufacturing grew at the fastest in more than two years in June and construction expanded for a second month. Markit said its three indexes together point to economic growth of at least 0.5 percent in the second quarter, adding to signs of recovery just as Mark Carney leads his first Monetary Policy Committee meeting after taking over at the Bank of England.
“The U.K. services sector finished off the second quarter with a stellar performance in June, giving the clearest signal yet that the worst days of the financial crisis are behind us,”CIPS Chief Executive Officer David Noble said. The data “mark a good first week for the new Bank of England governor.”
The pound rose against dollar after the report. It was at $1.5241 as of 9:57 a.m. in London, up 0.6 percent from yesterday. The yield on the 10-year U.K. government bond dropped 4 basis points to 2.34 percent.
Stimulus Decision
The BOE will probably keep its quantitative-easing programat 375 billion pounds ($571 billion) tomorrow, according to all 44 economists in a poll. All 53 economists in a separate survey say it will hold the key interest rate at a record low of 0.5 percent.
Markit said the improving surveys “will ease pressure on the MPC to embark on another round of QE.” Its U.K. construction index rose to 51 in June from 50.8 in May, while the factory gauge climbed to a two-year high of high of 52.5 from 51.5.
“Evidence that a recovery in the economy may be finally taking root is becoming more telling,” said Martin Beck, an economist at Capital Economics in London. “The recovery still faces some headwinds, but, for now at least, things seem to be moving in the right direction.”
The BOE will probably keep its quantitative-easing programat 375 billion pounds ($571 billion) tomorrow, according to all 44 economists in a poll. All 53 economists in a separate survey say it will hold the key interest rate at a record low of 0.5 percent.
Markit said the improving surveys “will ease pressure on the MPC to embark on another round of QE.” Its U.K. construction index rose to 51 in June from 50.8 in May, while the factory gauge climbed to a two-year high of high of 52.5 from 51.5.
“Evidence that a recovery in the economy may be finally taking root is becoming more telling,” said Martin Beck, an economist at Capital Economics in London. “The recovery still faces some headwinds, but, for now at least, things seem to be moving in the right direction.”
Europe Woes
In the euro region, the picture is less positive, with aservices gauge showing the industry contracted at a faster pace than initially estimated in June as the 17-nation currency bloc struggled to emerge from a record-long recession. The index rose to 48.3 from 47.2 in May, Markit said separately today. That’s below an initial estimate of 48.6 on June 20. A composite gauge of euro-area services and manufacturing output increased to 48.7 from 47.7.
Growth in China’s service industries slowed last month, according to a separate report today. The official non-manufacturing purchasing managers’ index from the National Bureau of Statistics and the China Federation of Logistics and Purchasing fell to 53.9 in June, a nine-month low, from 54.3 in May. Another service PMI released today by HSBC Holdings Plc and Markit rose to 51.3 last month from 51.2 in May.
Source: https://www.google.co.uk/search?gs_rn=19&gs_ri=psy-ab&cp=13&gs_id=1e&xhr=t&q=economy+growing&bav=on.2,or.r_qf.&bvm=bv.48705608,d.d2k&biw=1093&bih=428&wrapid=tljp1372844117877024&um=1&ie=UTF-8&hl=en&tbm=isch&source=og&sa=N&tab=wi&ei=YvDTUb7aOsyp0AX29ICQBw
In the euro region, the picture is less positive, with aservices gauge showing the industry contracted at a faster pace than initially estimated in June as the 17-nation currency bloc struggled to emerge from a record-long recession. The index rose to 48.3 from 47.2 in May, Markit said separately today. That’s below an initial estimate of 48.6 on June 20. A composite gauge of euro-area services and manufacturing output increased to 48.7 from 47.7.
Growth in China’s service industries slowed last month, according to a separate report today. The official non-manufacturing purchasing managers’ index from the National Bureau of Statistics and the China Federation of Logistics and Purchasing fell to 53.9 in June, a nine-month low, from 54.3 in May. Another service PMI released today by HSBC Holdings Plc and Markit rose to 51.3 last month from 51.2 in May.
Source: https://www.google.co.uk/search?gs_rn=19&gs_ri=psy-ab&cp=13&gs_id=1e&xhr=t&q=economy+growing&bav=on.2,or.r_qf.&bvm=bv.48705608,d.d2k&biw=1093&bih=428&wrapid=tljp1372844117877024&um=1&ie=UTF-8&hl=en&tbm=isch&source=og&sa=N&tab=wi&ei=YvDTUb7aOsyp0AX29ICQBw
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