Rally in services sector hits a hitch - Business - Evening Standard
       

Rally in services sector hits a hitch

The fragile state of the UK economy was underlined today after the recovery in the services sector stalled.

The Purchasing Managers Index gauge of activity in the sector, the engine room of the economy, slipped slightly from 51.7 in May to 51.6 in June.

Economists welcomed the fact it remained above the 50 cut-off between boom and bust but said growth at this level meant the recovery in the economy will be subdued. "This is encouraging," said George Buckley of Deutsche Bank. "But if they stabilise at this level it will mean the recovery will be anaemic."

The services sector includes City brokers as well as hotels and restaurants and accounts for three quarters of economic output. Vicky Redwood of Capital Economics said: "This is a reminder that the green shoots seen so far will not necessarily translate into a strong and sustained recovery."

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