-Adds Detail To Version Transmitted At 0831 GMT

LONDON (MNI) – The UK economy appears to have rebounded strongly at
the start of the third quarter, with the dominant services sector seeing
a sharp rise in output.

The July Index of Services was up 1.1% on the month and up 0.7% on
the year, with the monthly rise the largest since May 2011. National
Statistics said the extra bank holiday in June for the Diamond Jubilee
may have contributed to the stronger monthly growth in July and Olympic
ticket sales also likely boosted output.

National Statistics records ticket sales, whenever they were
actually made, in the month at which the service was delivered. So the
first of the Olympic ticket sales are showing up in these July services
data.

UK GDP in the second quarter was revised up Thursday to show a 0.4%
fall on the quarter, and the Bank of England and many other economic
forecasters have been expecting a strong rebound in Q3.

The Olympics took place between July 27 and August 12, and National
Statistics noted the arts and recreation component of the July Index of
Services, where ticket sales are recorded, was up 3.7% on the month.

On a sectoral, year-on-year basis government services were up 1.6%
in July, business services up 0.8%, distribution, hotels and restaurants
up 0.2% while transport, storage and communication was down 1.0%.

The contributions to the 1.1% monthly rise in the Index of Services
came from a 1.2% rise in business services output, a 1.8% rise in
distribution, hotels and restaurants output and a 1.1% rise in
transport, storage and communication.

Other data issued by NS Friday highlighted the decline in UK
productivity, with Q2 labour productivity on an output per hour basis
falling 0.9% and market sector productivity down 1.5% on the same basis,
the weakest outturn since 2005.

NS also said two nationalised lenders, Northern Rock and Bradford &
Bingley, would be fully incorporated into central government debt and
borrowing from early 2013.

-London newsroom: +44 207 862 7491; email: drobinson@marketnews.com

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