UK services PMI beats expectations in September

Activity in the UK services sector grew more than expected in September, according to data released on Wednesday.

The final Markit/CIPS services purchasing managers’ index fell to 52.6 from 52.9 in August, which was better than the 52.0 reading economists had been expecting and above the 50 mark that separates contraction from expansion.

The figure indicated a further moderate rate of expansion at the end of the third quarter following a contraction in June in the wake of the EU referendum.

Chris Williamson, chief economist at Markit, said: “The survey results suggest that the economy has regained modest growth momentum since the EU referendum, with further service sector expansion accompanied by a return to growth in construction and an especially strong revival of manufacturing.

“The improvement suggests the economy has regained a growth rate of approximately 0.3% after recovering from the initial shock of the EU referendum in late-June. If July’s low is included, the PMI surveys point to a mere 0.1% expansion of GDP in the third quarter, but this probably overstates the weakening in the rate of growth.”