LONDON (Reuters) - - Britain's private-sector services grew more than expected last month, suggesting the economic recovery picked up going into the second half of the year, a survey showed on Friday.
The Markit/CIPS UK Services Purchasing Managers' Index (PMI) rose by 2 points in June to 58.5, topping all forecasts in a
Reuters poll and staying comfortably above the 50 mark that divides growth and contraction.
Combined with similar manufacturing and construction surveys earlier this week, Markit said the gain suggested Britain's economy expanded around 0.5 percent from April through June, compared with 0.4 percent in the first three months of the year.
But it warned that the recovery looks increasingly unbalanced. Growth in British manufacturing declined to its lowest in more than two years last month, according to its survey on Wednesday.
The latest services PMI makes it more likely the Bank of England will want to raise interest rates from a record low 0.5 percent later this year, Markit said.
"But policymakers will want to see further improvements in the data, including signs of a sustainable upturn in pay growth, before feeling comfortable that the UK economy is ready for higher interest rates," said Chris Williamson, chief economist at Markit.
The detail behind the upbeat PMI reading, which does not include retailers or the public sector, sent some mixed signals.
Services companies took on staff at the slowest pace this year. New orders also increased at the weakest pace so far in 2015. However, businesses' optimism about the coming year held broadly unchanged at a high level.
The latest composite PMI, which combines the dominant services sector, plus construction and manufacturing, rose to 57.4 from 55.8.