Investing.com - U.K. service sector activity expanded at a slower rate than expected in December, dampening optimism over the health of the economy and dimming the case for higher interest rates, industry data showed on Wednesday.
In a report, market research group Markit said the seasonally adjusted Markit/CIPS Services Purchasing Managers Index fell to 55.5 last month from a reading of 55.9 in November. Analysts had expected the index to dip to 55.6 in December.
On the index, a level above 50.0 indicates expansion in the industry, below 50.0 indicates contraction.
Total activity rose at a strong overall rate, supported by a sharp rise in new business. Employment increased at a robust pace, albeit the weakest in five months.
Commenting on the report, Chris Williamson, Chief Economist at survey compilers Markit said, “The surveys point to the economy having grown 0.5% in the fourth quarter, a solid but perhaps unexciting pace that means GDP would have risen 2.2% in 2015."
GBP/USD was trading at 1.4634 from around 1.4638 ahead of the release of the data, while EUR/GBP was at 0.7330 from 0.7326 earlier.
Meanwhile, European stock markets remained lower. London’s FTSE 100 shed 0.8%, the EURO STOXX 50 slumped 0.35%, France's CAC 40 declined 0.7%, while Germany's DAX fell 0.8%.