UK services PMI jumps to 55.6 in Oct, hits half-yearly highs

The services sector activity in the UK economy extended its rebound into a second month and surprised markets to the upside last month, a fresh report from Markit Economics showed on Friday.

The services PMI eased to 55.6 in October versus a 53.6 reading booked in September. Markets predicted an expansion to 53.3 last month.

Key Points:

Marked and accelerated rise in service sector output

Growth of new work rebounds from September’s recent low

Input cost inflation eases to 13-month low

Chris Williamson, Chief Economist at Markit, noted: “The latest PMI surveys bring mixed news on the economy. While an upturn in business activity growth adds some justification to the Bank of England’s decision to hike interest rates for the first time in a decade, a deeper dive into the numbers highlights the fragility of the economy and points to downside risks for the outlook. The good news was that October saw business activity across services, manufacturing, and construction grow at its fastest rate for six months.”