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London - Britain’s powerhouse services industry grew more than forecast last month as the economy continued to display resilience following the June vote to leave the European Union.
IHS Markit said its Purchasing Managers Index dipped marginally to 52.6, above the 52.2 forecast in a Bloomberg survey. It marks the second month over 50, the dividing line between expansion and contraction.
The figure follows better-than-expected manufacturing and construction indexes published this week. A measure of all three sectors points to economic expansion of 0.1% in the third quarter, Markit said.
“The solid PMI readings for September will cast doubt on the need for any further stimulus from the Bank of England in coming months,” said Chris Williamson, an economist at Markit. “It’s clear, however, that the pace of expansion has cooled” and the economy “remains vulnerable to further setbacks.”
The central bank cut interest rates and revived asset purchases in August as the Brexit vote delivered an immediate blow to consumer and business confidence. It prompted some to predict the economy would fall into recession, but the downturn proved short-lived.
While business sentiment continued to recover from its post-referendum dip, it was still relatively weak as firms “reported ongoing uncertainty regarding the implications of Brexit,” Markit said.
Prime Minister Theresa May has set a March 2017 deadline for beginning formal divorce talks with EU leaders. Signs that the government is opting for a so-called hard Brexit sent the pound to a 31-year low on Tuesday.
That’s putting upward pressure on import prices. Markit said services firms raised their prices at the fastest rate in more than two-and-a-half years.
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