U.K. services industry hired more workers than projected in June as economy continued strengthening in the second quarter.
Markit Economics reported that its employment sub-index of the Purchasing Managers’ Index accelerated to 58.8 from May’s reading of 56.2. However, the main services index, which measures the biggest component of the world’s sixth largest economy, stood at 57.7, the lowest level in three months from the previous month’s reading of 58.6.
The figure nonetheless remains above the 50 mark that separates growth from contraction. Markit forecasts that the services gauge, together with factory and construction data this week, may signal the economy expanded 0.8 percent in the April-June quarter. This is the same as in the first quarter and would bring the gross domestic product to its pre-crisis high. The initial official GDP data for the second-quarter is expected to be released on July 25.
The bullish economic data has fuelled bets over when the Bank of England may hike its record-low benchmark interest rate. Unemployment rate has declined from 7.8 percent in June 2013 to 6.6 percent in the quarter through April.
“The economy is firing on all cylinders,” Chris Williamson, a chief economist at Markit, told Bloomberg. “The persistent strength of the PMI surveys raises the likelihood of policy makers deciding that a pre-emptive rise in interest rates later this year is warranted, especially given the speed at which the labor market is improving.”
Manufacturing sector also surprisingly shot upwards in June, reported Markit on July 1. The factory gauge surged to 57.5 in April from May’s figure of 57, exceeding projections of a figure of 56.8. The construction sector also posted strong growth in June. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
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