UK services sector returns to growth in November
The UK services sector returned to growth in November, according to a survey released on Tuesday.
The S&P Global/CIPS purchasing managers’ index rose to 50.9 from 49.5 in October, coming in above the flash estimate of 50.5 and marking the highest reading since July.
A reading above 50.0 indicates expansion, while a reading below signals contraction.
Tim Moore, economics director at S&P Global Market Intelligence, said: "UK service providers moved back into expansion mode during November as stabilising demand conditions helped to lift business activity from its recent malaise.
"Despite tentative signs of a turnaround in new orders, survey respondents once again commented on a lack of willingness to spend among clients. Many firms noted that low levels of business and consumer confidence, alongside elevated borrowing costs, had constrained sales opportunities in November. Overseas markets continued to show resilience, with strengthening US demand often cited as a driver of increased new export orders."
Gabriella Dickens, senior UK economist at Pantheon Macroeconomics, said the PMI should quell recession fears.
"The rebound in November’s composite PMI adds credence to our view that a recession will be avoided this year," she said.
"Admittedly, it still is consistent with activity barely rising in Q4. But the headline index is more likely to rise further in December than drop back below 50, given that the future activity index increased in November and was only just below its long-run average. In addition, we continue to think that S&P Global’s bespoke seasonal adjustment methodology is excessively weighing down the services PMI."