UK services sector grows to boost hopes of end to recession

Figures from the Chartered Institute of Purchasing and Supply (CIPS) released today show that the services sector in Britain grew again in November, as it did in October.

The continuing growth is good news for the economy as a whole as the services sector accounts for nearly three-quarters of the total economy. For this reason the services sector is often called the “engine room of the economy”.

The business activity index of CIPS was at 56.6, slightly down from the October peak of 56.9, and companies reported that new work coming in was at its fastest rate for over two years. British businesses are reporting confidence levels at their highest for two years as well.

CIPS’s chief executive David Noble said: “The services sector is continuing to grow but at a steady rather than spectacular rate.

“In contrast to the more fragile construction and manufacturing sectors, the UK services industry has shown growth for seven months now, which looked very unlikely in the dark days at the start of the year.”

The figures will be welcomed by Chancellor Alistair Darling who will deliver his Pre-Budget Report next Wednesday.

Although Britain is the only major economy still in recession, it is fairly clear that it will emerge from that status come the next quarterly figures in January. Nevertheless, it has been the longest recession since 1945.