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British services PMI falls to two-year low in August

Xinhua, September 4, 2015 Adjust font size:

British services purchasing managers' index (PMI), a gauge measuring the industry activity, fell to 55.6 in August from 57.4 in a month prior, said Markit Economics Limited Thursday.

The reading was significantly lower than the market estimates consensus of 57.7, though recording the 32nd successive month that the activity index staying above the 50.0 no-change mark. It was also the lowest reading over the past two years.

The London-based market surveyor said growth of business activity moderated for the second month in a run, primarily as a result of the slowest increase in new business since April 2013.

Business expectations remained strongly positive overall in August, with almost half of the survey panel anticipating growth at their units. Cost pressures eased for the third month, figures also showed.

Chris Williamson, Chief Economist at Markit, said: "The services PMI came in well below even the most pessimistic of economists' forecasts and follows disappointing news of a stagnation in the manufacturing sector earlier in the week."

"As such, the economy looks set to grow by 0.5 percent in the third quarter, down from 0.7 percent in the three months to June, with the ongoing upturn almost entirely dependent on the service sector," added Williamson.

The services sector dominates the UK economy, contributing around three quarters of the GDP, according to Office of National Statistics (ONS). Endit