New figures show that Britain's important services sector shrank in August for the fourth straight month, although signs of weakness were much less pronounced than expected.

The CIPS/Markit purchasing managers' index for services companies unexpectedly picked up to 49.2 last month from 47.4 in July. Any figure below means activity fell. Analysts had expected a further deterioration to 47.

Even so, the index for the sector, which makes up about three-quarters of the British economy, has remained below the 50 level since May.

The figures are unlikely to alter expectations for lower interest rates, especially as the report showed a cooling in price pressures.

New orders fell for a fourth straight month but the index reading posted its first improvement since February, up to 47.1 from a series low of 44.7 in July. And business expectations bounced to 61 from a low of 56.1 in July.

Cooling oil prices appear to have helped ease cost pressures for services sector firms, with the input price index falling to 66.8 from 70.2 in July, its lowest since March.