LONDON (Reuters) - Britain's services sector expanded at the fastest pace in more than six years last month, as new orders rose at the fastest pace since 1997, the monthly Markit/CIPS Purchasing Managers' Index (PMI) showed on Wednesday.
The very strong services reading follows similar gains in last week's manufacturing and construction PMIs, taking a composite of these indexes to its highest level since the series began in January 1998.
PHILIP RUSH, NOMURA
"It's another upside surprise, though perhaps not as surprising as the other PMIs. It still looks a bit frothy at these levels though there is support coming through from new orders and rising backlogs."
PAUL SMITH, SENIOR ECONOMIST, MARKIT
"The UK service sector turned in another stellar performance in August, building on the growth momentum seen during July. Moreover, the sector's recovery, which has been evident since the start of the year, has legs.
"New business increased in August at the sharpest rate for over 16 years, and more than 50 percent of panellists are forecasting a rise in activity from present levels during the coming months.
"With sister surveys for construction and manufacturing also signalling the continuation of substantial growth, the UK is well on course to register a strengthening of GDP growth over Q3 as a whole following the 0.7 percent q/q increase in Q2.
"Perhaps the only disappointment for August was little change in employment. However, if activity and sales can maintain their current growth velocities, then higher payrolls and, just as important for many workers, increased wages, should hopefully follow suit."
(Reporting by Andy Bruce)