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AFP
Activity in Britain’s crucial services sector recorded a record jump in August, rebounding strongly from a slump immediately following the country’s vote to exit the EU, a survey showed on Monday.
The latest Purchasing Managers’ Index data mirrors a strong recovery for the manufacturing PMI month-on-month, indicating that Britain is likely to avoid a recession following the outcome of the Brexit referendum in June, at least in the short term, according to analysts.
The PMI for the services industry surged to 52.9 points in August, from 47.4 in July, The figure had stood at 52.3 in June ahead of the referendum. A reading under 50 indicates shrinkage to activity.
“A record rise in the services PMI adds to the encouraging news seen in the manufacturing and construction sectors in August to suggest that an imminent recession will be avoided,” said Chris Williamson, chief business economist at survey compiler IHS Markit.
“Uncertainty has certainly eased considerably, helped by the swift settling-in of a new government and central bank stimulus.
“However, although improving on July’s seven-year low, business confidence is still at one of its lowest levels seen over the past four years,” he added in comments accompanying the data.
The Bank of England and analysts still expect Britain’s economy to struggle in the coming months as the government negotiates its exit from the European Union.
Prime Minister Theresa May wants to control immigration from the EU while retaining strong trading ties, despite warnings from other nations that single market access is incompatible with limits on the free movement of people.
Britain’s vote in favour of Brexit prompted the resignation of May’s predecessor David Cameron, who led the campaign to remain in the 28-nation bloc.