Investing.com - U.K. service sector activity expanded at the fastest pace in five months in January, easing concerns over the health of the economy, industry data showed on Wednesday.
In a report, market research group Markit said the seasonally adjusted Markit/CIPS Services Purchasing Managers Index inched up to 55.6 last month from a reading of 55.5 in December. Analysts had expected the index to dip to 55.3 in January.
On the index, a level above 50.0 indicates expansion in the industry, below 50.0 indicates contraction.
New business rose at the sharpest rate since last July, while service providers raised employment at the fastest pace since last October.
That said, output growth was weaker than the trend rates achieved in 2013, 2014 and 2015. Moreover, the longer-term outlook for business activity hit a three-year low.
Commenting on the report, Chris Williamson, Chief Economist at survey compilers Markit said, “The three PMI surveys for January collectively point to a slight upturn in the rate of economic growth, consistent with GDP rising at a quarterly rate of 0.6% in the first quarter, up from 0.5% in the fourth quarter, if current levels are sustained.”
GBP/USD was trading at 1.4463 from around 1.4429 ahead of the release of the data, while EUR/GBP was at 0.7546 from 0.7559 earlier.
Meanwhile, European stock markets remained broadly lower. London’s FTSE 100 shed 0.45%, the EURO STOXX 50 dipped 0.65%, France's CAC 40 lost 0.4%, while Germany's DAX slipped 0.8%.