Britain's service sector growing at record pace

Research firm Markit Economics said growth of new work for service companies in Britain accelerated in October to a record pace. Technically, the growth rate is off the charts. Markit has been collecting data on Britain's service sector since July 1996 and the pace of new orders is at a level that is faster than has been reported in the history of the survey, Markit said. The headline index, marking growth in the sector with figures above 50, was at the highest level since May 1997, reaching 62.5 in October, the research firm said. With fresh business coming in at a record pace, "capacity was subsequently tested," Markit said, "with backlogs increasing at a sharp pace." In turn, "companies responded by adding to their payrolls and the rate of growth was the best seen in nearly 16 1/2 years, Markit said. "The UK economic recovery moved up a gear again in October, with the purchasing managers indexes indicating record growth of output and employment. The all-sector PMI, measuring business activity across the UK private sector economy, hit an all-time high of 61.5 in October, up from 60.2 in September," said Markit Chief Economist Chris Williamson. "Historical comparisons of the PMI against gross domestic product suggest the latest survey data are consistent with a 1.3 percent quarterly rate of GDP growth, up sharply from previous quarters. The surveys also indicate that the rate of private sector job creation is currently running in excess of 100,000 per quarter," he said.