LONDON (Reuters) - Profits made by British services companies soared in the third quarter to the highest level since records started 18 years ago, but rates of return for North Sea oil and gas companies sank to an all-time low, data showed on Wednesday.
The Office for National Statistics said the rate of profit at services companies, which comprise the vast bulk of British businesses, rose to a record high of 16.8 percent in the third quarter from 14.9 percent in the previous quarter.
The profitability of oil and gas firms slipped below that for services firms for the first time since the survey started in 1997.
Hurt by the price of oil dipping below $100 a barrel during the third quarter, the net rate of return for oil and gas firms sank to 13.9 percent, the lowest on record, from 17.2 percent in the second quarter.
Brent crude oil prices
But the rate of profit for all types of companies reached its highest level since early 2008 -- just before the start of Britain's worst recession since before World War Two.
"The overall improvement in corporate profitability supports hopes that companies will invest at a decent rate over the coming months," said Howard Archer, economist at IHS Global Insight.
"Generally improved corporate profitability is also supportive to employment. It may also encourage companies to lift pay, which is important for sustainable healthy consumer spending."
British workers' earnings, excluding bonuses, grew by more than inflation for a second straight month in October after lagging behind rising prices for five years.
Business surveys since the third quarter suggest the economic recovery has softened, although Britain still looks set to outpace its euro zone peers this year.