The news was the latest in a “string of encouraging data releases”, according to Ernst & Young Item Club’s senior economic adviser, Andrew Goodwin.
“Finally the services sector appears to have rediscovered its mojo and it is generating a momentum which looks less and less likely to be derailed,” he added.
All three PMI surveys for June – across the services, manufacturing and construction sectors – have reported a four to five point increase in activity balances since February.
Goodwin said: “A pessimist could say we’ve been here before, most notably in 2011 when the recovery soon fizzled out. But this time it looks different, with the surveys also reporting much stronger order books, both at home and abroad, which suggests this time the pick-up in activity has genuine legs.”
The outlook for second quarter GDP numbers has also received a boost in the wake of these figures, with Goodwin predicting growth of 0.5% or more.
Ian Kernohan, economist at Royal London Asset Management, agreed: “The latest PMI surveys suggest GDP growth in the second quarter will be quite strong. Following on from a very strong British Chambers of Commerce survey earlier this week, the UK seems to be one area where recent economic news is consistently surprising to the upside.”
As a result, expectations for further quantitative easing from Mark Carney and co. have decreased and Kernohan said the latest updates will also complicate plans for the new BoE governor to introduce forward guidance on interest rates.
