U.K Services PMI Rises In November

The services sector — which includes everything from banking to waitressing — drew a reading of 55.1 in the month, well ahead of October's 54.5 reading, and even further ahead of the forecast 54.2 growth that economists had predicted.

The pace of expansion eased slightly since October but was still in line with the long-run survey average. Meanwhile, the weak pound was reported to be a factor boosting international demand, while firms also reported marketing efforts and new products.

Businesses in Britain's services sector grew at their fastest pace since January last month, a survey showed on Monday, and the broader economy kept up its momentum in late 2016, even if firms have some worries about the year ahead.

A decline in overall business expectations will, however, cause some concerns surrounding the outlook with underlying uncertainty over protracted Brexit negotiations a significant factor in sapping confidence.

Chris Williamson, chief business economist at IHS Markit, said: “The further upturn in the vast services sector shows that the pace of UK economic growth remains resiliently robust in the fourth quarter, despite ongoing uncertainty caused by Brexit”.

“The three PMI surveys collectively indicate that the economy will grow by 0.5% in the fourth quarter.”

Input prices continued to increase in November, although the rate of growth did slow for the first time since May, which suggests the immediate impact of higher import costs may have peaked, although there is still the potential for upward pressure on prices over the next few months.

"November PMI survey data from IHS Markit and CIPS signalled that the UK service sector remained on a firm growth path towards the end of 2016," said IHS Markit in a statement.

"The rate of expansion of total activity accelerated further to the strongest since January. Employment growth picked up to the fastest since April, partly fuelled by the sharpest build-up of outstanding work since July 2015."

"Rising prices – often linked to the weaker pound – are a big concern, however, and suggest that inflation is set to lift higher. The past two months have seen the steepest rise in businesses’ costs for over five-and-a-half years. These higher costs will inevitably feed through to consumers in the form of higher prices."

Following the release of U.K. Markit/CIPS services PMI data for November at 4:30 am ET Monday, the pound rose slightly against its major opponents. The pound was trading at 1.2724 against the greenback, 145.06 against the yen, 0.8364 against the euro and 1.2882 against the franc around 4:31 am ET.