The UK service sector sustained “solid” growth in June as volumes of new business continued to rise, according to a closely-watched index.<\/p>\n
The Markit\/Cips services purchasing managers’ index (PMI) edged up to 53.9 in June from 53.8 in May. A reading above 50 indicates expansion.<\/p>\n
But Markit warned that job creation in the sector remained minimal.<\/p>\n
The economy as a whole could have grown by just 0.3% in the second quarter, down from 0.5% in the first, it added.<\/p>\n
Official economic growth figures for the second quarter will be released by the Office for National Statistics (ONS) later this month.<\/p>\n
‘Worrying signs’<\/p>\n
The services data follows Markit PMIs for manufacturing and construction in recent days, which showed a slowdown in growth in both sectors.<\/p>\n
On a quarterly basis, Markit said that growth in services looked to have slowed to 0.5% in the second quarter from 0.8% in the first three months of the year.<\/p>\n
Chris Williamson, chief economist at Markit, said that growth in the sector masked some “more worrying signs” in some of the other survey indicators.<\/p>\n
“Inflows of new business rose at the slowest pace for four months in June, and optimism about the coming year hit an eight-month low,” he said.<\/p>\n
“Companies kept headcounts largely unchanged, highlighting a reluctance to expand workforces as a result of the uncertain outlook and renewed weakness of the manufacturing and household sectors.<\/p>\n
“The scope for the private sector to make up for public sector layoffs therefore still looks limited, meaning unemployment could stay stubbornly high for some time.”<\/p>\n
Meanwhile, growth in the eurozone services sector slowed again in June to an eight-month low, while business confidence slipped to its lowest level in two years, Markit said.<\/p>\n
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