UK service sector 'surprisingly buoyant' in December

Activity in the UK service sector grew in December at its fastest rate since July, according to the latest purchasing managers' index (PMI). The PMI for December was 54.0, up from 52.1 in November. Any figure over 50 indicates that the sector is growing. But confidence about the future remains subdued, with business expectations matching September's two-and-a-half year low. The report's author described conditions as "surprisingly buoyant". "The December survey rounds off a reasonable fourth quarter for the service sector, which is likely to again provide the main stimulus to overall economic growth," Chris Williamson added. The service sector accounts for more than 70% of the UK's economic output. "The UK CIPS/Markit report on services has followed the sister manufacturing report in improving in December, but the recovery still appears to have ground to a halt in Q4," said Vicky Redwood at Capital Economics. "A weighted average of the surveys over Q4 as a whole points to overall GDP doing little better than stagnating." Neville Hall, at Credit Suisse, said: "It does suggest that, after what looks as if it could be a pretty poor fourth quarter of 2011, as if the economy has regained a bit of momentum going into 2012." "And that probably means that even if the fourth quarter growth numbers are negative the UK could successfully skirt recession rather than go through another double dip."