Pace of UK's economic growth slackens to a nine-month low
THE pace of the UK recovery slowed to its lowest level in nine months in March as the powerhouse services sector completed a hat-trick of narrowing growth across the economy, according to new figures.
Data from the closely watched Markit/CIPS purchasing managers' index (PMI) showed that the sector – representing three-quarters of output – recorded a reading of 57.6 in March, where the 50 mark separates growth from contraction.
It marked a fall from the 58.2 recorded in February and its lowest reading since June last year.
The figures follow data earlier in the week showing growth also slowed marginally in manufacturing and construction, leaving the all-sector PMI at a nine-month low of 58.1.
This indicates that while the sectors continue to show robust improvement, the pace has slackened off.
Overall economic output is still below its pre-crisis peak at the start of 2008.
Markit chief economist Chris Williamson said the data was "suggestive of an underlying slowdown in the pace of expansion", adding that there may be concerns growth could ease further should there be a continued strengthening in the pound – hitting trade.
But despite this and the weather-hit earlier part of the year, they indicated gross domestic product (GDP) growth at 0.7% for the first quarter, maintaining the rate achieved at the end of 2013.
The latest survey suggested the services sector grew for its 15th month in succession, but increases in new business and employment levels were slower than in February.
Mr Williamson said: "While March saw growth slow across the services, manufacturing and construction sectors, all three continue to expand at very strong rates, meaning the economy looks to have grown by at least 0.7% again in the first quarter.
"Policymakers will be concerned that growth could ease further if sterling continues to appreciate. There's no evidence to suggest that any slowdown will be anything other than modest, adding to indications that the UK is set to see growth outpace its peers in 2014."
Index reading in March, where 50 separates growth from contraction