The UK economy is set for another "robust" quarter after the dominant services sector defied the floods to report more strong growth in February.
The headline reading of 58.2 in the Markit/CIPS purchasing managers’ index (PMI) was the lowest since June but still came in ahead of the level of 50 that separates growth from contraction. Growth has now been recorded for 14 months and the latest increase in output was supported by another marked rise in new business. Confidence in the outlook also strengthened to the highest for nearly four-and-a-half years.
The survey found that adverse weather in some parts of the UK disrupted activity but that the relatively mild winter had also provided a support to growth.
Alongside good performances in PMI manufacturing and construction, Markit said the upbeat picture of the services economy points to the UK enjoying another quarter of robust economic growth of approximately 0.7%.
Its chief economist Chris Williamson believes the economy is set for its best year of growth since 2007, easily surpassing the 1.8% seen last year. He said: “Most encouraging of all is the record increase in job creation that the three PMI surveys collectively signalled in February. There’s no end in sight to the good news: with business confidence in the services economy rising further in February, growth should pick up again in March.”
The UK expanded by 0.7% in the final quarter of the year, with economists predicting an annual improvement of up to 3% for 2014.