The fall of the British service sector purchasing managers' index (PMI) in November from 62.5 to 60 was a surprise, according to economists, but does not knock the economy off course for a strong final quarter in 2013.

The services sector makes up about 77 percent of the British economy, and it has been performing strongly all year, contributing to unexpected growth throughout 2013. Consensus forecasts for November services PMIs had been for 62, itself a small fall from the October figure.

James Knightley, Britain economist with ING Bank, said that despite the unexpected fall from the 16-year-high in the October figures, the British economy was still well set for growth.

He said, "The PMI remains well above the break-even 50 level so continues to signal very strong growth. Additionally, when combined with the increases in the manufacturing and construction PMIs from earlier in the week the overall story on UK growth is very strong."

Knightley said the composite index (services, manufacturing and construction sectors), where the new order component reached a record high, is consistent with the economy accelerating in Q4 of 2013 to possibly in excess of 1 percent growth quarter on quarter.

"This would be the strongest rate of quarterly growth since mid-2007," said Knightley.

He added, "This supports our view that unemployment will continue to fall sharply, but with the Bank of England looking to adopt macro-prudential policy to rein in the housing market we think the BOE will wait until early 2015 before raising rates."

The new business index fell slightly to 63.1 from 63.4 in October, the highest level since the series began in 1996, and the employment index also fell back, decreasing to 54.2 from 56.2. Input and output price indices both increased further in November, with firms citing higher energy bills as well as higher average wages.

John Zhu, British economist with HSBC Global Research, said, "There will be some concerns that inflationary pressures are now rising again. The input prices and prices charged indices in the composite PMI are both at their highest readings in over two years."

He added, "While actual nominal wage growth data have yet to pick up from near-record lows, the fact that firms are reporting a lack of staff driving up backlogs of work means wage pressures will be something to keep an eye on."

Blerina Uruci, British economist with Barclays Economics Research, said that despite the unexpected fall in November services PMI fast growth was still likely.

She said, "In addition, the strength in the new orders and future business expectations imply the current positive momentum is likely to be maintained." Endi

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