Investing.com - Service sector activity in the U.K. expanded at the slowest pace in seven months in January, dampening optimism over the country’s economic outlook, industry data showed on Wednesday.
In a report, market research group Markit said the seasonally adjusted Markit/CIPS Services Purchasing Managers Index fell to 58.3 last month from a reading of 58.8 in December. Analysts had expected the index to inch up to 59.0 in January.
On the index, a level above 50.0 indicates expansion in the industry, below 50.0 indicates contraction.
Commenting on the report, Chris Williamson, Chief Economist at survey compilers Markit said, “Although the pace of expansion slowed, we must remember that growth was exceptionally strong in previous months, and also that parts of the country saw record rainfall in January.”
“Even with the easing seen in January, the sector is still expanding at a rate that bodes well for another strong GDP reading in the first quarter. Taken together, the three PMI surveys are signaling quarterly GDP growth of 0.8%.”
Following the release of that data, the pound added to losses against the U.S. dollar, with GBP/USD shedding 0.28% to trade at 1.6278, compared to 1.6291 ahead of the data.
Meanwhile, European stock markets remained mildly higher. London’s FTSE 100 inched up 0.35%, the EURO STOXX 50 rose 0.3%, France's CAC 40 added 0.3%, while Germany's DAX tacked on 0.1%.