UK service sector slows but remains strong, PMI survey says

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Image caption The service sector is a key part of the UK economy

Growth in the UK service sector slowed last month, according to a closely-watched survey.

However, the sector - which covers about three quarters of the UK economy - continued to expand at a strong pace.

The latest CIPS/Markit purchasing managers' index (PMI) for the sector fell to 58.3 in January, down from 58.8 the month before but still well above the 50 mark that indicates expansion.

Markit said the UK economy continued to recover at a "rapid pace".

The PMI figure for January was the lowest reading since June last year, but the survey also found that business confidence was at its highest level for nearly four years.

Rising confidence and a backlog of orders meant that employment growth in the sector "remained marked".

Recent PMI surveys of both the manufacturing and construction sectors have also indicated that economic growth remained strong last month.

Markit said that taken together, the three PMI surveys suggest that the UK economy will grow by 0.8% in the first quarter of the year.

This would be an increase on the rate of 0.7% in the final three months of 2013.

"The service sector saw another month of strong growth in January, suggesting that the UK economy continues to recover at a rapid pace," said Markit chief economist Chris Williamson.

"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."

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