–Adds Composite PMI Data To Version Transmitted At 0945 GMT
–Composite Feb PMI Falls To 55.2 vs 56.2 In January
–Composite Feb PMI Points To 0.5%q/q GDP Growth in Q1 2011 – Markit
–UK Feb CIPS Services PMI 52.6 Vs 54.5 In Jan – Markit/Reuters
–Markit Says Underlying Pace Of UK Growth ‘Flattish’

LONDON (MNI) – The rate of UK service sector growth slowed in
February having rebounded in January from a snow hit December, according
to the Purchasing Managers Index from Markit.

The weaker-than-expected service sector PMI dragged the composite
PMI number down to 55.2, lower than the 56.2 seen in January.

Despite falling, the composite PMI number remains above the 50/50
expansion/contraction mark and points to growth of 0.5% in the first
quarter – a markedly stronger rate than the -0.6% seen in Q4 2010,
Markit said. A record CIPS February manufacturing outturn helped offset
the softer services growth.

The service sector continued to shed jobs and Markit said its data
suggested the underlying pace of economic growth at the moment seemed
“flattish”.

February’s Markit/CIPS Business Activity Index came in at 52.6,
down from January’s eight-month high of 54.5 and below analysts’ median
forecast of 54.0.

The service sector report found new business volumes rose and
service sector business confidence rose to a nine month high. However,
for the fifth consecutive month there were service sector job losses.

Service sector inflation eased slightly from January highs,
although it remained elevated by historic standards.

“February saw growth of the UK service sector return to the modest
rates seen prior to the weather related readings of December and
January, leaving it on course to deliver around 0.3% q/q growth for Q1,”
Paul Smith, senior economist at Markit, said.

“Even with strength in manufacturing and the upside surprise to
February construction data, the economy looks likely to deliver a rate
of expansion that only offsets the decline in Q4 2010 to leave the
underlying trend in GDP flattish,” he added.

–London newsroom 0044 207 862 7491; email:drobinson@marketnews.com

[TOPICS: M$B$$$,M$BDS$,MT$$$$,MABDS$]