British services sector expanded at the weakest pace in five months in May, as growth rates for output and new business worsened, survey results from Markit Economics revealed Wednesday.
The seasonally adjusted Markit/CIPS UK Services Purchasing Managers’ Index for the services sector, fell to 56.5 in May from 59.5 in April. However, any reading above 50 indicates expansion in the sector.
The latest decline in the index was the steepest since August 2011, but it remained above its long-run trend level of 55.2.
New orders received by the the UK service sector increased for the twenty-ninth successive month in May, but the rate of growth marked the slowest since last December.
Service providers raised their payroll numbers further in May, despite a slight easing in the rate of job creation to a five-month low.
On the price front, input price inflation accelerated at the fastest rate in eight months in May, driven by greater cost pressures to salaries, fuel and some foodstuffs.
The 12-month outlook held by service providers improved slightly in May.
“Rate hikes later this year should not be ruled out: there are signs that the disappointing rate of expansion is only temporary, linked to uncertainty surrounding the general election, and the surveys point to rising inflationary pressures as well as a further tightening of the labour market, ” Chris Williamson, a chief economist at Markit, said.