British services PMI rises to 55.6 in January

British services purchasing managers' index (PMI), a gauge measuring the industry activity, slightly up to 55.6 in January from 55.5 in December, said data supplier Markit on Wednesday.

According to the report, new business rose for the thirty-seventh consecutive month in January. The rate of expansion strengthened to a six-month high, and remained stronger than the average pace since the survey started in July 1996.

The rate of job creation picked up from December's five-month low in January, and was strong overall. This contributed to an overall decline in outstanding business during the month, only the second contraction in nearly three years.

Inflationary pressures remained historically weak in January. The rate at which average input prices rose was among the weakest registered over the past six years, despite reports of salary pressures.

"The three PMI surveys for January collectively point to a slight upturn in the rate of economic growth, consistent with GDP rising at a quarterly rate of 0.6 percent in the first quarter, up from 0.5 percent in the fourth quarter, if current levels are sustained," Chris Williamson, Chief Economist at Markit commented.

"However, order book backlogs are already falling at the fastest rate for almost three years and companies have scaled back their hiring in response to growing uncertainty about the economic outlook at home and abroad," he added. Endit