Strong data from the U.K. services sector in March, coupled with rising retail and consumer confidence, may indicate an improving British economy, easing worries that it could enter a triple-dip recession.
Data released on Thursday show an improving services sector, which represents 77 percent of the country's gross domestic product (GDP).
The purchasing managers' index (PMI) for the sector jumped to 52.4 in March from 51.8 the previous month. That is the fastest rate of expansion month-on-month since August 2012 and the third successive monthly increase.
"The survey significantly lifts hopes that expansion in the dominant services sector in the first quarter was more than enough to offset probable contraction in both industrial production and construction output, thereby preventing a further GDP drop and triple-dip recession," said Howard Archer, chief European and U.K.economist at IHS Global Insight.
Investec chief economist Philip Shaw echoed those views, saying, "It's a decent indicator and we do place some weight on it in assessing where the economy is, so at least the service sector, or the majority of the service sector, which the PMI covers, appears to be growing, albeit modestly."
The improving economic picture may be part of the reason the Bank of England decided not to announce further stimulus and to keep rates unchanged on Thursday.
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