It is projected that the Bank of England will change its growth forecasts in next week’s Inflation Report as the result of an increase in services sector activity. <br />
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Data showing the services sector dominating new orders at a record rate suggests that the UK’s economic growth is “booming”, according to economists. There is a renewed confidence among Britain’s companies, which is apparent in the rate of hiring new employees – it is at the fastest pace in more than 16 years.<br />
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"Business is picking up and firms are recruiting like we’ve never seen before,"explains Chris Williamson, an economist at <a href="http://www.markiteconomics.com/"; target="_blank" title="New Window - markit.com">Markit</a>. <br />
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The data for October has overshadowed forecasts predicting a hiring index of just 59.8. The Markit/CIPS UK Services Purchasing Managers' Index actually shows a rate of 62.5, which is the highest it has been since May 1997. Service sector growth is partly boosted by growth in the financial sector and increase in mortgage activity. <br />
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According to economists, the UK economy is projected to grow by as much as 1.3% in the last quarter of 2013. Private sector jobs continue to grow at a rate of approximately 100,000 per quarter; they averaged 70,000 over the last four quarters. Due to the rapid hiring, the unemployment rate is also expected to fall within the next year. <br />
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Thanks to this growth and the booming economy, experts believe that the Bank of England will revise its growth projections next week.