Business

UK services sector sees slowest growth for 19 months

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The UK services sector lost momentum at the end of last year, growing at its slowest rate for 19 months, a closely watched survey suggests.

The Purchasing Managers UK Services PMI slipped to 55.8 in December, down from 58.6 in November, marking its lowest level since May.

Despite the slowdown, the sector remains comfortably above the 50-mark which separates growth from contraction.

The pound fell sharply after the data.

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It weakened against both the euro and the dollar, nearing a 17-month low against the dollar of $1.5188 and slipping 0.2% lower against the euro.

The slowdown was much sharper than economists had expected, and Markit chief economist Chris Williamson said it would fuel concerns that the UK economy is "too fragile", but said it was too early to be worried.

"The latest PMI reading is still strong, merely down from unusually high levels earlier in the year and in line with the average seen in the years leading up to the financial crisis," he added.

Despite the weaker-than-expected December reading, volumes of new business continued to rise with survey respondents reporting "favourable" market conditions.

David Noble, group chief executive officer at the Chartered Institute of Purchasing & Supply said the marketplace was "still healthy".

"It offers more opportunity for growth in the coming months," he added.

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