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The headline seasonally adjusted UK Markit/CIPS Services PMI Business Activity Index rose to 55.0 in March, up from 53.3 in the previous month. UK service sector growth hits three-month high in March supported by business activity and incoming new work both rising at the strongest rates so far in 2017.
The latest survey indicated that service providers added to their payrolls at a slower pace in March. Moreover, the rate of job creation was only marginal and the weakest recorded since August 2016. At its lowest level since August 2016, the demand for higher wages bore down on profits and new staff hiring.
Survey respondents remained optimistic about the year-ahead business outlook, with almost half of the survey panel forecasting growth while only one-in-nine expect a fall in activity. However, intense cost pressures continued in March, which led to the fastest rise in prices charged by service sector firms since September 2008
"The March uptick in the PMI surveys merely brings the data in line with a neutral policy stance at the Bank of England. As such, the data add to the sense that, with economic and political uncertainty likely to intensify as the Brexit process gets underway, policymakers are likely to continue to stress the need to look through any further upturn in inflation and focus instead on the need to keep policy on hold to support economic growth," said Chris Williamson, chief business economist at IHS Markit.
