A survey has shown that the rate of growth in the British service sector slipped back slightly in November but remained near October's four-month high as new business picked up at its fastest rate since June.
The headline business activity index in the Markit/CIPS PMI index eased to 53 in November from October's four-month high of 53.2 and bang in line with the forecast.
The new business index rose to 52.4 from 52 in October, the highest since June, and business confidence also improved. But employment fell at a faster rate than October and firms also ran down backlogs of work, suggesting a build-up of spare capacity.
The figures are therefore unlikely to alter expectations that the Bank of England will keep policy loose as it waits to see how planned government spending cuts hit demand.
The headline activity index has been above the 50-level which separates contraction from expansion for more than 18 months, but November's pace of growth was again below the survey average.
Markit economist Paul Smith said the growth in the UK service sector activity was solid but described the rise in new work as still lacklustre as economic uncertainties undermined business and consumer spending.
Markit said business expectations had improved since October although the degree of business confidence in the UK service sector remained historically low due to fears over government spending cuts.
Inflation pressures eased last month, with firms raising prices at a slower pace than in October, in line with a slight slowdown in their own costs.
Overall, Friday's survey suggests the services sector is not expanding as quickly as the manufacturing sector, where activity picked up at its fastest pace in 16-years in November.
