The UK services sector experienced the sharpest rise in business activity in more than five years in August, as consumer spending recovered in the wake of the coronavirus crisis.
A closely watched survey by IHS Markit found that the sector’s purchasing managers’ index (PMI) reading came in at 58.8 in August, above the 56.5 from July and sharply higher than the record low of 13.4 in April.
Though the figure was lower than analysts had expected, it is still the highest result since April 2015.
The services sector is hugely important to the UK economy — it includes finance, law, retail, engineering, and consulting — and accounts for around 80% of the country’s economic output.
PMIs are an indicator of private sector activity and are given on a scale of 1 to 100. Anything above 50 signals growth, and anything below means contraction.
Because PMIs measure rate of change, even this rapid expansion of activity does not mean that the sector has recovered from the impact of the crisis. Output still remains far below pre-pandemic levels.
The data follows Tuesday’s PMI reading from the manufacturing sector, where output grew at its fastest pace since May 2014.
The rapid increase in output came as the easing of coronavirus restrictions prompted firms to rapidly scale up production, IHS Markit said.
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