UK’s service industry growth slowed more than expected in June

Growth in the UK's dominant services industry slowed more than expected in June, however, the economy as a whole appeared to expand robustly over the past three months, according to a survey yesterday.

UK government bonds outperformed and the sterling eased off recent near-six-year highs following the monthly services purchasing managers' index (PMI) falling to a three-month low of 57.7 – after hitting its highest so far this year in May.

However, according to economists, the numbers remained well above long-run averages and could point to a growth pick-up in the second quarter from the first three months of the year.

The data comes after robust showing of manufacturing and construction sectors seen in surveys this week that reinforced bets that the Bank of England would raise interest rates in 2014.

Reuters quoted Chris Williamson, chief economist at Markit which compiles the surveys as saying, alongside an ongoing surge in construction and the largest quarterly rise in manufacturing output for 20 years, the services PMI confirmed that the UK economy was firing on all cylinders.