The UK service sector grew at a disappointingly slow rate in December, according to a monthly index published today.
The index, released by the Chartered Institute of Purchasing and Supply (CIPS), dropped to a reading of 54.9 last month from 56.7 in November. The figure fell well short of the 57.5 anticipated by analysts.
It was the worst result for three months and sits just above September's reading of 54.7, which was a 20-month low.
However, earlier figures from the Confederation of British Industry revealed that shop sales - which make up a significant chunk of the service sector - increased dramatically in December after heavy price discounting by outlets.
The group's survey shows that 53% of firms thought sales were up on December last year compared with only 20% saying they were down. The balance of 33% contrasts favourably with the 19% figure produced in November.
Roy Ayliffe, director of professional practice at CIPS, said: "The UK services sector continued to expand at a robust rate in December, although purchasing managers witnessed a slowdown in overall business activity.
"This in turn led to a contraction in outstanding business levels, as panellists reported having more time to concentrate on existing projects."
Input cost pressures continued to bite last month, Ayliffe added, although they loosened slightly from November's four-year high. Confidence levels remained high, although these also weakened compared with November.
