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UK service sector growth slows markedly

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Date: Thursday 03 Apr 2008

LONDON (ShareCast) - Growth in Britain’s service sector slowed more than expected in March, according to fresh data from the Chartered Institute of Purchasing Supply.

The purchasing managers index tumbled to 52.1 last month, its lowest since last November, down from 54 in February and far more than the slip to 53.3 economists had predicted.

Despite today’s figures, the sector is still growing, as any read above 50 indicates expansion.

Within the survey, the prices charged component dropped to 56.2 from 56.8, but the measure of input prices leapt to a record high of 66.2, up from 65.8 in February.

Elsewhere, the employment sub-index improved to 52.2 from 51.9, although the new business measure sank to 53.4 from 54.6.

Analysts still reckon the Bank of England will cut interest rates by a quarter point to 5% at next week’s meeting of monetary policy committee members, despite worries about inflationary pressures.