Finance

United Kingdom consumers face sharpest price rise in services for almost a decade

United Kingdom consumers face sharpest price rise in services for almost a decade

The Markit/CIPS purchasing managers' index (PMI) for services fell to 53.8, down from 55.6 in October.

Posting below the no-change mark of 50.0 in November, the seasonally adjusted Business Activity Index signalled a contraction of the service sector for the first time in three months.

"The Caixin PMI readings in November showed the economy has maintained stability, and there was no imminent risk of a significant decline in the growth rate", said Zhong Zhengsheng, director of macroeconomic analysis at CEBM Group, a subsidiary of Caixin Insight Group.

Service sector companies reported an uptick in business and consumer spending in the November PMI survey, although some firms noted that stretched budgets and uncertainty as a effect of Brexit had acted as a brake on growth.

"Given the strength of order book growth and hiring, as well as the elevated level of business optimism, the euro zone should start the New Year on a solid footing", he added. Panelists widely blamed the deterioration in business performance to the goods and service tax. Furthermore, the rate of expansion accelerated to the fastest since October 2016.

"We are surprised with the sudden dip in services activity in November, especially given that manufacturing firms, which face similar issues, reported higher activity".

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As a result, firms raised their average selling prices at the quickest pace since July.

Moreover, the rate of prices charged inflation was the second-fastest seen since the survey began in 1996.

Bolstered by the improvement in the service sector, the Caixin China Composite Output Index, which covers manufacturing and service companies, rebounded to 51.6 from October's 16-month low of 51.

As was the case with service providers, manufacturing companies were restricted in their ability to fully pass on higher cost burdens to consumers amid reports of intensive competitive conditions.

A PMI covering the bloc's dominant service industry soared to a six-month high of 56.2 from October's 55.

July's GST continued to affect businesses as it led to sluggish demand and lower customer turnout.