UK service sector sees record high growth in more than seven years in April

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LONDON, May 6 (Xinhua) -- Britain's service sector output witnessed the fastest rise in April since October 2013 as business and consumer spending rebounded significantly amid the easing of lockdown restriction, according to a joint report released here Thursday.

The purchasing managers' index (PMI) Business Activity Index for the service sector surged to 61.0 in April, up from 56.3 in March, signalling the sharpest rate of output expansion for seven and a half years, revealed a joint survey by IHS Markit, a London-based global information provider, and the Chartered Institute of Procurement & Supply (CIPS), which serves the procurement and supply profession.

"April data illustrates that a surge of pent-up demand has started to flow through the UK economy following the loosening of pandemic restrictions, which lifted private sector growth to its highest since October 2013," said Tim Moore, economics director at IHS Markit.

"Stronger demand encouraged a faster pace of job creation across the service sector in April," said the survey, as the employment growth accelerated to its fastest since October 2015 in the month.

In addition, service sector firms overwhelmingly anticipate an upturn in business activity during the next 12 months. Around 65 percent of the survey panel forecast an expansion, while only 7 percent predict a decline, said the survey.

"If the rebound in order books continues along its recent trajectory during the rest of the second quarter, then service sector output growth looks very likely to surpass the survey-record high seen back in April 1997," said Moore.

Meanwhile, the Composite Output Index, a weighted average of the Manufacturing Output Index and the Services Business Activity Index, increased to 60.7 in April, up from 56.4 in March, above the 50.0 no-change mark for the second month running, figures showed.

However, the overall rate of input cost inflation was the fastest since February 2017, which resulted in another strong increase in average prices charged for business and consumer services, said the survey.

"Inflationary pressures remained a concern for service providers in April, with higher staff costs, transport bills and raw material prices all adding to business expenses," said Moore.

Duncan Brock, group director at the CIPS, said the positive trend in recovery is "likely to accelerate in the coming months, but stretched supply chains remain a sticking point, along with inflation potentially biting chunks out of wages and business margins, threatening to put a brake on this fast track to economic normality".

In England, all shops reopened from April 12 as lockdown eases, along with hairdressers, beauty salons and other close-contact services.

The British government's four-step lockdown exit plan is expected to see all legal restrictions in England being removed by mid-June.

To bring life back to normal, countries such as Britain, China, Russia, the United States as well as the European Union have been racing against time to roll out coronavirus vaccines. Enditem

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