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UK Service Sector Logs Strong Rebound In March

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The UK service sector logged a strong rebound in March as activity, new orders and employment picked up from February, final data from IHS Markit showed on Wednesday.

The services Purchasing Managers' Index advanced to 56.3 from 49.5 in February. The flash reading was 56.8.

The score was above the 50.0 no-change level for the first time since October 2020. The latest reading also signaled the fastest rate of output expansion for seven months.

Survey respondents linked rising levels of activity to a recovery in business and consumer spending, while some parts of the service economy commented on a boost from higher residential property transactions in March.

The survey showed that stronger client demand and forward bookings ahead of easing lockdown measures contributed to an increase in total new work for the first time in six months.

Driven by forward bookings and improved confidence about the business outlook, job creation increased at the fastest rate since 2019.

On the price front, the survey showed that overall rate of input price inflation was the highest for nearly three years. As a result, prices charged by service providers rose at the sharpest pace since November 2017.

Finally, business expectations rose for the fifth straight month in March.

Reflecting robust rises in manufacturing and services output, the composite output index rose less than initially estimated to 56.4 from 49.6 in February. The flash score was 56.6.

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