Business activity in the UK services sector declined during March following 13 straight months of growth. The UK Chartered Institute of Purchasing and Supply (CIPS) said today that its index of business activity in the service sector fell to a seasonally adjusted 49 in January from an un-revised 50.2 for the previous month. This is the first recorded drop in activity in the sector since January 2001. The drop in the service-sector index in March was lower than expected, with the consensus of analysts' forecasts for the index to rise to 50.4 from the original 50.2 estimate for February.
"The fall of activity recorded in March largely reflected the combination of a decline in levels of income business and the continuing uncertainty in global markets regarding the short- to medium-term economic outlook. A significant proportion of the survey panel reported that the build up to, and subsequent start of the war in Iraq had further heightened uncertainty," CIPS said. The sub-index for incoming new business and new orders in the service sector fell to 48.8 in March, from 49.9 in February. //www.fxcentre.com