Will the services sector lead the UK economy out of recession?
Despite news yesterday that the construction industry has contracted for the 22nd month in a row, today we saw news that the services industry in the UK has reported growth for the eighth month in a row. While these conflicting economic indicators are obviously causing unrest and uncertainty within investment markets, there is no doubt that the services industry is the most vital element of the UK economy and will effectively pull the UK out of recession.
Not only has the sector reported an increase in activity in December but the rate of increase in unemployment in the services sector has now slowed to an 18 month low. The vast majority of service companies in the UK also believe that the next 12 months will be very much more productive than the last 12 months which does bode well for the future. However, there is still a need for caution regarding the UK economy because each day brings a different set of figures and very different indicators.
The last 12 months have been perhaps the most difficult 12 months in which to the forecast the direction of the UK economy. One day we see a positive indicator in the retail sector and then the next day investors are deflated with bad news from the construction sector then we hear that the services sector is performing better than many had expected. This flip-flopping of economic data is making life very difficult for economic forecasters and hence there is much confusion within the UK investment community.
Share this..
Related stories
Tesco sets its sights on the financial sector
After reporting pre-tax profits of £1.42 billion for the six months to August 29, only fractionally up on last year's figure, Tesco has revealed plans to attack the UK financial sector and in particular the UK banking industry. Hot on the heels of a decision by the competition commission to block many new store applications and expansion plans, it would seem as though leading UK supermarkets are...
Read MoreCurrent account switches fell 10% in 2015
22/01/2015 The number of people switching bank accounts fell by 10% last year, despite high profile campaigns aimed at encouraging people to switch. Payment system operator Bacs published figures showing that 1.03 million people changed their current account provider last year, compared to 1.15 million in 2014. The Current Account Switching Service (CASS) was created in 2013 to help inc...
Read MoreLookers issue downbeat statement on the UK car industry
Despite yesterday's announcement from Pendragon that the company believes the mountain of unsold cars in the UK is nearly clear, fellow car dealership Lookers has today issued a statement which is a little more conservative to say the least.
While the company recognises that the UK government's £300 million car scrappage scheme has gone a long way to injecting interest into the sec...
Recession 'to continue through 2009'
The coming recession in the UK's economy will last for the majority of 2009, according to the Confederation of British Industry (CBI).It predicted that GDP will shrink by 1.7 per cent next year and will achieve only 0.8 per cent growth in 2008.The CBI had estimated in September that growth would reach 1.1 per cent and 0.3 per cent for 2008 and 2009 respectively.However, it had to revise its figure...
Read More