Investing.com - U.K. service sector activity expanded at a faster than expected rate in November, boosting optimism over the health of the economy and supporting the case for higher interest rates, industry data showed on Thursday.
In a report, market research group Markit said the seasonally adjusted Markit/CIPS Services Purchasing Managers Index increased to 55.9 last month from a reading of 54.9 in October. Analysts had expected the index to rise to 55.0 in November.
On the index, a level above 50.0 indicates expansion in the industry, below 50.0 indicates contraction.
New business growth also strengthened to a four-month high. That said, other indicators were less buoyant, with employment growth slowing and backlogs rising only marginally. Moreover, the longer-term outlook for business activity was little-changed from October’s two-and-a-half year low.
Latest data also signaled that inflationary pressures remained relatively weak.
Commenting on the report, Chris Williamson, Chief Economist at survey compilers Markit said, “The survey data so far are pointing to 0.6% GDP growth in the fourth quarter, and no change in average prices charged for goods and services."
GBP/USD was trading at 1.4915 from around 1.4935 ahead of the release of the data, while EUR/GBP was at 0.7078 from 0.7069 earlier.
Meanwhile, European stock markets remained mostly higher. London’s FTSE 100 eased up 0.1%, the EURO STOXX 50 tacked on 035%, France's CAC 40 advanced 0.55%, while Germany's DAX added 0.6%.