Investing.com - British service sector activity accelerated to the fastest since January last month, but the data also pointed to a marked build up in inflationary pressures in the sector, industry figures showed on Thursday.
Financial data company Markit said its services purchasing managers’ index rose to 54.5 in October from September’s 52.6.
Economists had expected the index to tick down to 52.4.
On the index, a reading above 50.0 indicates expansion, below indicates contraction.
Faster growth of total business activity was driven by a stronger expansion of incoming new business. New contracts rose at the fastest rate in nine months.
Employment increased for the third month running, but the rate of job creation remained well below the marked rates achieved in 2014 and 2015.
The survey also showed that a weak pound drove a marked intensification of cost pressures at service providers in October. Input price inflation surged to the highest since March 2011, the report said.
“Given the faster growth of both business activity and prices, it’s hard to see how the Bank of England would consider any further stimulus appropriate, though policymakers will most likely want to stand ready to act if the UK’s path to Brexit leads to an escalation of economic uncertainty,” Chris Williamson, Chief Economist at survey compiler Markit said.
GBP/USD was trading at 1.2346 from around 1.2235 ahead of the release of the data, while EUR/GBP was at 0.8989 from 0.8992 earlier.