Activity in the sector – which includes restaurants, hotels, transport and business services and accounts for more than three-quarters of the economy – rose at the fastest pace in eight months according to the
The headline index rose to 59.1 from 57.7 in June, where anything above 50 indicates expansion. Economists were expecting a more modest increase to 57.9.
The figure offsets weakening growth indicated in the equivalent surveys for the manufacturing and construction sectors, suggesting the third quarter got off to a reasonable start in July following growth of 0.8% in both the first and second quarters.
Economists said the better-than-expected PMI increased the prospects that one or members of the Bank's nine-strong monetary policy committee will vote for a rate rise when it meets for its monthly policy decision on Wednesday and Thursday. It would be the first time a member voted for a rise since rates were cut to an all-time low of 0.5% in
However, the majority of MPC members are expected to vote to leave rates unchanged, and any dissent will only be made public when the minutes of the meeting are published two weeks after the event.
Heightened expectations of a rate rise in the
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