Service sector growth brings economic hope

Greater than expected growth in the service sector in December has raised hopes that the UK economy can avoid a contraction in Q4 2011.

The Markit/Chartered Institute of Purchasing and Supply Purchasing Managers’ Index recorded a reading of 54 for December, up from 52.1 in November. Readings above 50 indicate growth.

Chris Williamson, chief economist at Markit, says: “Service sector companies reported surprisingly buoyant business conditions in December, with activity and new business growing at the strongest rates since July.

“The December survey rounds off a reasonable fourth quarter for the service sector, which is again likely to provide the main stimulus to overall economic growth.”