The UK's service sector recovers

The UK service sector is apparently growing so fast that firms are struggling to cope with demand.  The Markit services purchasing managers’ index says growth in the sector is at a two-year high with a score of 56.9, which exceeded the expectations of analysts.

Growth has been so fast that service sector firms are experiencing the biggest work backlogs since 2007.  But despite hiring more people, the inability to cope with demand most likely stems from a lack of confidence in the economy as a whole.

The UK narrowly avoided a triple-dip recession earlier this year, as it posted miniscule growth figures for the economy.  But it turns out that the economy didn’t enter a double-dip recession in the first place.  Official figures have been revised to show the UK economy was only in one period of recession after the 2008 financial crisis.

With confidence coming back to the economy and plenty of work in the service sector, it looks likely that unemployment will fall as firms take on new staff to take up the increased workload. Although the majority of the jobs created will most likely be low-level, temporary and admin positions. But that’s the nature of the beast.