Positive economic data boosts hope for end to recession
The key services sector reported growth during December according to the latest activity index from the Chartered Institute of Purchasing and Supply (CIPS).
The index showed a reading of 56.8 in December, up from 56.6 in November – any reading above 50 indicates growth.
Not only was the figure slightly above economists’ forecasts, it was just under the 27-month high of 56.9 reported in October and was the eighth month of growth.
In the meantime, it was revealed earlier this week that a sharp rise in new orders led to a rise in manufacturing activity in December.
According to the closely-watched CIPS/Markit purchasing managers’ index (PMI), factory activity grew at its fastest pace in more than two years with the index rising to 54.1 in December, up from 51.8 the previous month and beating forecasts of a reading of 52.
Both sets of figures are likely to boost hopes that the UK will have emerged from recession in the fourth quarter of 2009.
Britain has been lagging behind other economies and is now the last major economy that is still in recession.
Meanwhile, commenting on the services sector data, Vicky Redwood, senior UK economist at Capital Economics, said the figures “provided further evidence that the economy moved decisively out of recession in the fourth quarter”.
“However, the recovery is likely to struggle to maintain its recent momentum,” she added.
Meanwhile, Owen James, economist at the Centre for Economics and Business Research, said: “The figures released this week support our view that the UK will have returned to growth in the last quarter of 2009 and that this recovery, although sluggish, will continue into 2010.”
Visited 1806 times, 1 so far today
Comments (0)
Trackback URL | Comments RSS Feed
There are no comments yet. Why not be the first to speak your mind.