After notably weak purchasing managers surveys for manufacturing and construction, the service sector PMI showed a welcome (and unexpected) rise to 51.8 in February, from 51.5 in January. Though the read-across from the PMIs to gross domestic product is not always great, Markit, which produces the figures, said the PMIs were consistent with modest growth.
This is what Markit said about the service-sector PMI: "Business activity in the UK service sector increased for a second consecutive month in February. New business also increased, leading to a further expansion of payrolls. Confidence also continued to improve, with optimism regarding future activity at a nine-month high.
"The headline seasonally adjusted Business Activity Index posted 51.8 in February, slightly above January’s 51.5 and a five-month high. Modest growth of activity has now been signalled for two successive months. More than 23% of respondents recorded increased activity since January, with anecdotal evidence suggesting stronger client demand led to the development of new projects and larger client bases."
And this is what it said about the broader picture: "So far, the PMIs suggest that the economy will have grown by 0.1% in the first quarter, barely making up for any of the 0.3% decline seen in the final quarter of last year. However, growth could turn out stronger than this as there is good reason to believe that at least some of the weakness in manufacturing and construction was due to business being disrupted by bad weather, meaning a brighter picture may emerge in March."
Earlier, the British Retail Consortium said retail sales in February were their strongest for more than three years, with a 2.7% like-for-like increase in sales value compared with a year earlier, and a 4.5% rise in total sales.