UK services slips as economy loses pace

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RAPID growth in Britain’s services sector eased slightly in September and a broader measure of private-sector expansion fell to a six-month low, a major business survey showed yesterday, raising the prospect of an end-of-year slowdown.

The Markit/CIPS services purchasing managers’ index (PMI) dropped to a three-month low of 58.7 in September from August’s nine-month high of 60.5, falling slightly more than economists had forecast.

The index is still well above historic averages and the 50-mark that separates growth from contraction.

But combined with Wednesday’s weak manufacturing PMI, a composite measure for the whole of the private sector dropped to its lowest in six months, sinking to 58.1 from 59.7.

Markit’s chief economist Chris Williamson said the index suggested gross domestic product growth of 0.8 per cent in the three months to September, only a shade lower than the 0.9 per cent achieved in the second quarter. But prospects for the final three months of 2014 looked less rosy - in line with Bank of England forecasts that the recent exceptionally strong period of growth for Britain’s economy will soon come to an end.

“The worry is that the economy could slow faster than anticipated,” Mr Williamson said yesterday.