Services figures may see earlier rate rise

The monthly Markit/CIPS purchasing managers index for the services sector beat economists’ expectations and contrasted with a mostly downbeat recent string of economic data.

A similar survey of manufacturing hit a one-year low last week, but the rebound in services took the composite PMI for the private sector as a whole to a three-month high.

This may encourage the Bank of England to rethink a prediction made in May that the economy would slow slightly in the second half of 2014.

The central bank publishes new forecasts next week, and some economists said the data could prompt one or two policymakers to back a rate rise at this week’s policy meeting.

The BoE will announce its rate decision tomorrow although a breakdown of how policymakers voted will not be available until minutes of the meeting are published later in the month.

“The pick-up in the composite PMI somewhat increases the chances that the Monetary Policy Committee decides to raise interest rates before the end of the year, and may even produce a split interest rate vote (this week) for the first time since July 2011,” said Samuel Tombs at Capital Economics.