UK Services Sector Growth Slows At End Of 2015

Estimates of GDP for the final three months of 2015 have been revised down slightly to 0.5%, following a slowdown in the growth of Britain's dominant services sector.

The closely watched Markit (NasdaqGS: MRKT - news) /CIPS services purchasing managers' index (PMI) fell to 55.5 in December, compared to 55.9 in November - however, this is considerably above the 50 "no-change level" which indicates the industry is stagnating.

Markit's chief UK economist, Chris Williamson, has warned "a rosy outlook is by no means assured" as the business world commences 2016 - as "there are signs that the recovery remains worryingly unbalanced and that business confidence is waning".

The average "all-sector" PMI reading for the fourth quarter was 55.6, and this also took into account a slump seen in manufacturing PMI.

However, the decline was stymied somewhat by better news in the smaller construction sector's PMI - as an uptick in housebuilding contributed to a "solid pace of expansion".

Vicky Redwood, chief UK economist at Capital Economics, added: "While the surveys do not cover the retail sector, anecdotal evidence does not suggest that it was a particularly good December for the high street."

However, she believes a recent fall in energy prices should give a further boost to output in the coming months, Ms Redwood warned: "The recovery seems unlikely to pick up significant pace this year as it is battling the renewed fiscal squeeze and uncertainly ahead of the EU referendum."

According to Markit/CPS, growth in employment rates during December was among the slowest recorded since September 2013.

"Although construction sector hiring continued to boom, service sector employment showed the smallest rise for five months and factory headcounts rose only modestly," the report added.

It (Other OTC: ITGL - news) predicts GDP for the whole of 2015 would have expanded by 2.2% in 2015.