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Business

Service sector adds to UK rebound hopes

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Opening sequence

Business

Service sector adds to UK rebound hopes

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COMING UP:Service sector adds to UK rebound hopes

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Transcript

00:00:01
>> The UK service sector is getting back its appetite for growth. The August Purchasing Managers Index showing the biggest ever monthly rise, comfortably above the 50 point mark which denotes an expanding economy. That follows equally positive figures from the manufacturing and construction sectors. Reuters' UK Economics Editor, David Milliken, says a weaker pound is the biggest factor.
00:00:24
>> We have sort of services businesses reporting greater demands for their exports and also sort of more demand from people sort of holidaying at home possibly also foreign tourists as well. So, some benefit from the weaker pound.>> Reduced turmoil on the political front also lifting the mood.
00:00:41
The optimism helping the battered pound to regain a little strength. But data compiler markets still believes the figures point to a major slow down, perhaps close to zero growth. That leaves the Chancellor with a tough call to make as he draws up his autumn financial statement.>> I think that sort of Phillip Hammond will be sort of, again sort of wanting to think very much towards the future.
00:01:02
Rather than just looking at a few past months of data. So it's going to be a difficult judgement he's got to make in terms of how much the economy is likely to slow over the, sort of the coming months and years. A tricky decision for the Bank of England, too.
00:01:16
It cut rates in August and hinted at another reduction before year-end, but that was before the data took an upturn. Prospects for a fresh cut now very much in the balance.