LONDON (ShareCast) - Britain's services sector grew for the second month in a row in June, although the rate of expansion slowed as new business contracted and unemployment accelerated.
The purchasing managers' index slipped
to 51.6 last month from 51.7 in May, but economists had expected an increase to 52. A read of over 50 indicates growth.
There was a drop to 49.7 in the new business index, which fell for the first time since November, down from 51.8 in May.
But business confidence kept rising. The expectations index registered its highest level in nearly two years.
"The services sector is showing signs of life but it is still too early to tell if this is the start of a full blown recovery," said David Noble, CEO of the Chartered Institute of Purchasing and Supply.
Howard Archer, chief UK economist at IHS Global Insight, thinks the Bank of England will keep interest rates down at 0.50% until deep into 2010, and could extend quantitative easing programme to the maximum £150bn next Thursday.
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