UK services growth offers respite for Rachel Reeves ahead of Spring Statement

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Services helped drive UK private sector output to grow more than expected in March and at the fastest pace in six months, striking a positive note for the government ahead of the Spring Statement on Wednesday.

The preliminary reading of the UK S&P Composite Purchasing Managers’ Index, a measure of the health of the private sector, rose to 52 in March, up from 50.5 in February and the highest in six months.

It was well above the 50 level, which separates growth and contraction, and higher than the 50.3 forecast by economists polled by Reuters.

Chris Williamson, chief business economist at S&P Global Market Intelligence, said: “An upturn in business activity in March brings some good news for the government ahead of the chancellor’s Spring Statementoffering a respite from the recent flow of predominantly downbeat economic data.”

However, he noted that the improvement was driven by “only small pockets of growth”, notably in financial services, with consumer-facing businesses and manufacturers continuing to battle economic headwinds at home and abroad.