Forexpros — Service sector activity in the U.K. rose unexpectedly in July, growing at the fastest pace since March industry data showed on Wednesday.
In a report, market research group Markit said the seasonally adjusted Markit/CIPS Services Purchasing Managers Index rose to 55.4 in July from 53.9 in June.
Analysts had expected the index to decline to 53.2 in July.
On the index, a level above 50.0 indicates expansion in the industry, below 50.0 indicates contraction.
The U.K. service sector expanded in July at a marked and accelerated rate.
Activity was supported by an equally strong gain in new business as demand and market conditions were reported by panelists to have improved.
However, lingering uncertainty over the direction of the economy undermined expectations and hiring decisions.
Moreover, business confidence remained historically low and payroll numbers were fractionally down following two months of negligible gains.
Commenting on the report, Paul Smith, senior economist at Markit said, “Given the headwinds of austerity at home and the ongoing public debt issues in major export markets, the scenario of a continued choppy recovery would, at the present time, be the best forecast for the sector’s performance in the coming months.”
Following the release of that data, the pound moved higher against the U.S. dollar, with GBP/USD gaining 0.41% to trade at 1.6366.
Meanwhile, European stock markets were down. The EURO STOXX 50 dipped 0.1%, France’s CAC 40 shed 0.35%, the FTSE 100 slumped 0.95%, while Germany’s DAX fell 0.35%.
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