Investing.com – Activity in the U.K. service sector registered an growth for a fourth consecutive month in November, with the rate of expansion at a 10-month high, bolstering optimism over the health of the British economy as the sector makes up approximately 80% of gross domestic product, industry data showed on Monday.
In a report, market research group Markit said the seasonally adjusted Markit/CIPS services purchasing managers’ index (PMI) unexpectedly rose to 55.2 last month from a reading of 54.5 in October.
Analysts had expected the index to fall to 54.0.
On the index, a level above 50.0 indicates expansion in the industry, below 50.0 indicates contraction.
On the downside, Markit indicated that business sentiment was at its weakest since July.
The research group further noted that input price inflation remained sharp, but eased for the first time since May.
“The further upturn in the vast services sector shows that the pace of UK economic growth remains resiliently robust in the fourth quarter, despite ongoing uncertainty caused by Brexit,” Markit chief economist Chris Williamson said in the report.
He said that the data collected so far pointed to fourth quarter growth of 0.5%.
Williamson noted that the rising prices due to the weaker pound were a “big concern” and suggested that inflation was set to lift higher.
“The sustained improvement in the business surveys and sharp rise in prices suggest that the odds will continue to shift away from the Bank of England adding more stimulus,” Williamson commented.
Immediately following the report, GBP/USD was trading at 1.2732 from around 1.2707 ahead of the release of the data, EUR/GBP was at 0.8367 from 0.8370 earlier, while GBP/JPY traded at 145.19 compared to 144.91 previously.
Meanwhile, European stock markets traded higher, with London’s FTSE 100 gaining 0.90%. The Euro Stoxx 50 rose 1.63%, France's CAC 40 traded up 1.54%, while Germany's DAX 1.80%.