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| UK service sector recovers from 11-month low | UK service sector recovers from 11-month low |
| (about 2 hours later) | |
| Activity in the UK's service sector picked up slightly in September, according to a closely-watched survey. | Activity in the UK's service sector picked up slightly in September, according to a closely-watched survey. |
| The Markit/CIPS purchasing managers' index (PMI) for services rose to 53.6, up from an 11-month low of 53.2 in August. Above 50 indicates growth. | The Markit/CIPS purchasing managers' index (PMI) for services rose to 53.6, up from an 11-month low of 53.2 in August. Above 50 indicates growth. |
| However, the UK still lags behind the eurozone, where services PMI grew strongly to 55.8 last month. | |
| IHS Markit said rising costs meant average prices in the UK were at their highest since April. | IHS Markit said rising costs meant average prices in the UK were at their highest since April. |
| The "price pressures will pour further fuel on expectations" that the Bank of England will raise interest rates soon, said Chris Williamson, chief business economist at IHS Markit. | The "price pressures will pour further fuel on expectations" that the Bank of England will raise interest rates soon, said Chris Williamson, chief business economist at IHS Markit. |
| But it was likely to be a "difficult decision", because the economy was not growing that strongly, he said. | But it was likely to be a "difficult decision", because the economy was not growing that strongly, he said. |
| Rate rise? | Rate rise? |
| Modest services activity, combined with a decline in construction and "robust" manufacturing, leaves the UK on course for "subdued" growth of 0.3% in the third quarter, according to IHS Markit. | Modest services activity, combined with a decline in construction and "robust" manufacturing, leaves the UK on course for "subdued" growth of 0.3% in the third quarter, according to IHS Markit. |
| Analysts were split on what the health check for the service sector, which covers a wide range of businesses from restaurants to law firms, meant for the UK's economic prospects. | Analysts were split on what the health check for the service sector, which covers a wide range of businesses from restaurants to law firms, meant for the UK's economic prospects. |
| "The services PMI indicates that the sector is still stuck in a rut, casting doubt over whether the Monetary Policy Committee will press ahead with a rate rise 'over the coming months,'" said Samuel Tombs, chief UK economist at Pantheon Macroeconomics. | "The services PMI indicates that the sector is still stuck in a rut, casting doubt over whether the Monetary Policy Committee will press ahead with a rate rise 'over the coming months,'" said Samuel Tombs, chief UK economist at Pantheon Macroeconomics. |
| But another economist, Paul Hollingsworth of Capital Economics, said the rise in September's services sector PMI would help to "assuage fears that the economy is losing momentum". | But another economist, Paul Hollingsworth of Capital Economics, said the rise in September's services sector PMI would help to "assuage fears that the economy is losing momentum". |
| The Bank has forecast economic growth of 0.3% in the third quarter, so the IHS Markit findings should not prevent the Bank from "pressing ahead and raising interest rates in November", Mr Hollingsworth said. | The Bank has forecast economic growth of 0.3% in the third quarter, so the IHS Markit findings should not prevent the Bank from "pressing ahead and raising interest rates in November", Mr Hollingsworth said. |