The British service industry continued to contract in December, according to figures published today by CIPS/Markit.
The survey, which is a closely followed indicator of the strength of the real economy, showed that activity within the sector was at 40.2 on the index in December. Analysts were predicting that the figure would be closer to 39, but this discrepancy offers little solace as an index reading of 50 represents 0% growth.
Companies in the service industry cut jobs at a faster rate in December than at any time since the index began twelve years ago. Most analysts are predicting that the decline will accelerate over the next few months.
The service sector will be watching the Bank of England closely on Thursday, as the Monetary Policy Committee is expected to cut rates by between 0.5 per cent and 1 per cent.