It’s one of the key pieces of data that contributes to GDP figures: the UK service sector accounts for around three-quarters of the UK economy. But unfortunately, it’s a case of so far, not so good. The service sector is up just 0.2% in the first month of 2012 from December 2011.
Still, compared with January last year, the figure looks a little healthier – growth of 1.8% compared to 2011. So there has been a slight improvement in the year-on-year picture. And, given that the GDP growth figure for the final quarter of 2011 was revised down this week, any kind of growth spurt is better than none at all. Especially as the Organisation for Economic Co-operation and Development (OECD) has just announced that it reckons the UK economy will contract by 0.4% in the first three months of 2012, taking the country into a technical recession.
But back to the good(ish) news. The January lift is due mainly to the distribution, hotels and restaurant sectors, which grew by 0.8%. Second in the expansion stakes, the transport, storage and communication industries are up 0.7%. Looking at the three months from November to January (overall growth is only a smidgeon higher than January's figure at 0.3%), business services and finance have had the biggest impact, up 1.7% for the quarter.
But with all the juddering stops, starts and backwards jumps, it seems like Bank of England governor Mervyn King was right when he predicted a ‘zigzag’ recovery...