Oct. 6 (Bloomberg) -- Britain’s services companies grew 0.2 percent in July, led by business services and finance.
The increase followed a revised 0.3 percent decline in June, the Office for National Statistics said in London today. On the year, services, which account for about three quarters of the economy, grew 1.3 percent.
The Bank of England’s Monetary Policy Committee meets today to decide whether to resume buying bonds as the government’s budget squeeze and Europe’s debt crisis hurt growth prospects. While data yesterday showed economic growth slowed more than initially estimated in the second quarter, a separate report said services growth unexpectedly strengthened in September.
“In the monthly indicators since the last MPC meeting, there have been more upward than downward surprises, so that would argue for holding back” on more stimulus, Alan Clarke, an economist at Scotia Capital in London, said before the release. “But we all know it’s coming, so why wait? It’s a very close call, but I think November is a slightly better bet.”
In the three months through July, services rose 0.9 percent from the previous three months, the most since November 2007. From a year earlier, the three-month index was up 1.3 percent.
On the month, business services and finance grew 0.4 percent, while government services increased 0.3 percent, the statistics office said. Within business services, growth was led by legal and consultancy work. The index for distribution, hotels and restaurant slipped 0.1 percent.
In a separate release today, the statistics office said labor productivity was unchanged in the second quarter from the previous three months and was down 0.2 percent on the year.
Output per hour increased 1.3 percent on the quarter, while unit labor costs, or the amount spent on wages and salaries to produce each unit of output, rose 0.3 percent.
In manufacturing, output per hour increased 3.7 percent from the first quarter, the most since at least 1997. The increase was partly due to people taking leave around Easter and the extra public holiday for the Royal Wedding in April. Services output per hour rose 1.1 percent.
--With assistance from Mark Evans and Harumi Ichikura in London. Editor: Fergal O’Brien
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