Britain's service sector grew more slowly than expected in February and output price inflation moderated, according to a survey.
The Chartered Institute of Purchasing and Supply/Royal Bank of Scotland index, covering businesses ranging from hotels to financial services, eased to 57.4 last month from 59.2 in January. That was the weakest reading since September.
The survey will provide some comfort to the Bank of England which has raised borrowing costs three times since August in an effort to curb price pressures in the fast-growing economy.
Britain's services industry expanded at its fastest pace in nearly a decade in December and the Bank of England mentioned the strength of the sector in the minutes of its January meeting, at which it surprised markets by raising rates to 5.25%. Today's report is seen as reducing the chances of a rise later this week.
Britain's services sector has expanded for 47 consecutive months but February's business activity index was the lowest since September. Growth in new business fell to its lowest since November 2005.
Output price inflation slowed although input price inflation remained relatively high, suggesting firms' pricing power may not be as strong as some believe.
