The services sector, which accounts for nearly three-quarters of the UK economy, shows continued signs of recovery, according to the latest Markit/CIPS Purchasing Managers’ Index (PMI) survey.
The index stood at 52.6 in September, down from August’s 52.9, but still above the 50 level which indicates expansion. It had shown a steep drop to 47.7 in July following the Brexit vote, but recovered the following month, and has remained positive since.
The PMI figures are calculated by surveying selected purchasing professionals and business owners across a range of companies. The PMI for the manufacturing sector was recently recorded at 55.4 – its highest level for two years.
Markit’s Chief Business Economist, Chris Williamson, said: ‘The survey results suggest that the economy has regained modest growth momentum since the EU referendum, with especially strong growth appearing in manufacturing.
‘The risk of recession in the second half of 2016 has therefore all but evaporated, and the solid PMI readings for September will cast doubt on the need for any further stimulus from the Bank of England in coming months.’
Earlier this week, the International Monetary Fund (IMF) predicted that the UK economy would grow by 1.8% in 2016, which would make it the fastest-growing G7 economy this year – although the IMF repeated its warning that the UK’s decision to leave the EU was likely to have a negative impact on long-term growth.