The UK service sector showed stronger than expected growth in October, which has boosted the pound.
The purchasing managers’ index (PMI), a survey of activity in the UK service sector, showed an increase to 53.2 in October, up from 52.8 in the previous month. A fall to 52.5 had been expected.
Boosted by the news, sterling rose by some 0.5%, to $1.614 and 1.148 euros.
The PMI is produced by data services company Markit and any number above 50 means an expansion in the sector. The October score was the highest since June.
As the sector represents around three-quarters of the UK economy, it is a significant figure. The survey also found evidence of increasing price pressures in the sector.
Nevertheless, service companies have lowered their expectations for the coming months due to concerns over the economy and the impact of government cuts.
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