Hiring up but growth slows in the service sector

In a sign that the UK economy has started the year on the front foot, the latest CIPS/Markit purchasing managers’ index gave a reading of 56.7 in February, down from 57.2 in January but above the no-change mark of 50.

The survey said a combination of a three-month high in new business volumes and work backlogs led to employment rises that have been bettered only once since the report began in 1996.

Firms said the rise in activity was the result of a general pick-up in market conditions, helped by a rise in promotions and advertising.

A combined output reading from the main sectors of the economy gave a three-month high reading of 57, up from 56.9 in January. This combined reading includes manufacturing, construction and services.

The figures offer more signs of a pick-up in pace after the services sector posted a 19-month low of 55.8 in December, amid a slowdown in the overall rate of recovery in final quarter of last year.

Markit chief economist Chris Williamson said: “The UK economy is on course for yet another robust performance.”