Investing.com - The U.K.'s giant services sector expanded at a faster rate than expected in September, easing concerns over the economy and supporting the case for higher interest rates, industry data showed on Wednesday.
Market research firm Markit said that its U.K. services purchasing managers' index rose to a seasonally adjusted 53.6 last month from a reading of 53.2 in August. Economists had expected the index to hold steady in September.
On the index, a level above 50.0 indicates expansion in the industry, below 50.0 indicates contraction.
Service providers remained under pressure from sharply rising operating expenses, which contributed to the fastest rate of prices charged inflation since April.
At the same time, relatively subdued domestic demand acted as a drag on activity growth, with the latest rise in incoming new work the slowest for 13 months.
Commenting on the report, Chris Williamson, Chief Economist at survey compilers Markit said, “The three PMI surveys put the economy on course for another subdued 0.3% expansion in the third quarter, but the fourth quarter could see even slower growth."
He added that, "The rise in price pressures will pour further fuel on expectations that the Bank of England will soon follow-up on its increasingly hawkish rhetoric and hike interest rates."
GBP/USD was trading at 1.3277 from around 1.3255 ahead of the release of the data, while EUR/GBP was at 0.8860 from 0.8875 earlier.
Meanwhile, European stock markets remained mixed. London’s FTSE 100 shed 0.1%, the EURO STOXX 50 dipped 0.1%, France's CAC 40 lost 0.2%, while Germany's DAX tacked on 0.2%.