UK economy shows signs of recovery ahead of Carney's start

LONDON (Reuters) - Britain's service sector picked up in April, adding to signs that the country's economy extended its recovery into the second quarter of the year, official data showed on Friday.

The Office for National Statistics said output rose 0.2 percent compared with March, when it was flat, and was 2.0 percent higher than in April last year.

The services sector makes up more than three quarters of British gross domestic product (GDP), and Friday's data adds to signs of some momentum in the economy which grew by 0.3 percent in the first quarter of the year.

Services output grew 0.5 percent in the three months through March, according to GDP data released on Thursday. The slight acceleration to 0.8 percent in the three months in April adds to modest growth in manufacturing and retail.

Separate data released earlier on Friday showed British consumer morale rose to its highest level in just over two years in June and British house prices rose at their fastest annual pace in nearly three years.

The ONS also said hourly productivity across all sectors of the economy was unchanged in the first quarter, ending a run of six consecutive quarters of declines, as the economy picked up.

In a sign of muted inflation pressures, unit labour costs fell 0.4 percent in the first three months of 2013 and were down 0.5 percent from a year earlier, their first drop since the end of 2010, the statistics agency said.

Bank of England policymakers meet next week for the first time under new governor Mark Carney. Less inflation pressure could eventually help reduce opposition to more bond buying although more than half of the economists in a Reuters poll expected no resumption of asset purchases this year.

(Reporting by William Schomberg and David Milliken)

Source: http://news.yahoo.com/uk-services-output-picks-april-adding-recovery-signs-083331520.html

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