Investing.com - Activity in the UK service sector slowed slightly but remained solid last month, according to a closely watched business survey released on Wednesday.
Research firm Markit said its services purchasing managers’ index fell to 53.9 in September compared to forecasts for a reading of 54.0. The prior month’s reading was 54.3.
“The service sector continued to report solid steady business growth in September which, alongside news of sustained expansions in both manufacturing and construction, suggests the UK economy expanded by just under 0.4% in the third quarter," said Chris Williamson, chief economist at survey compiler Markit.
The report indicated that higher levels of business activity were attributed to a solid increase in new work and competitive pricing strategies during September.
But the report also noted that Brexit concerns and heightened economic uncertainty remained the main constraints on growth.
Higher wage bills and rising fuel prices resulted in a sharp cost increases last month, but prices charged by service providers increased at only a moderate pace, with the latest rise the slowest for just over a year.
“The steady economic expansion and intensification of cost pressures will add to views that the next move in interest rates will be another hike. However, with Brexit uncertainty intensifying in recent weeks, any rise seems unlikely prior to the scheduled March 29th exit from the EU,” Williamson concluded.
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