Services companies in the UK report a further uptick in December

According to a poll released on Friday, businesses in Britain's massive services sector witnessed another uptick in growth this month, indicating that the economy has enough momentum to stave off a recession for the time being at least.

The preliminary reading for December showed that the S&P Global/CIPS UK Composite Purchasing Managers' Index (PMI), which includes manufacturing and service companies, increased to 51.7. This is the highest level in six months and was higher than the final reading for November, which was 50.7.

Reuters surveyed economists, who predicted a modest increase to 50.9.

According to Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, "the UK economy continues to dodge recession with growth picking up some momentum at the end of the year to suggest that GDP stagnated over the fourth quarter."

On Thursday, the Bank of England maintained borrowing prices at a 15-year high and emphasised that they would need to stay high in order to contain the risks associated with persistently rising inflation. Rate cuts for next year are being priced by financial markets, though.

According to the PMI, business activity in the services sector increased to 52.7 from 50.9, which was also the highest level since June and only the second time since July that the index saw growth over the 50.0 mark.

However, manufacturing's reading dropped to 46.4, undoing some of November's gain and marking the 17th straight month of decline.

A decline in manufacturing orders was countered by a strong increase in new business for service providers, resulting in the first overall order rise in six months.

For the fourth consecutive month, staffing numbers decreased.

The poll revealed a small reduction in the inflation of services prices, which the BoE keeps a careful eye on, providing a modest amount of comfort.

Though it decreased to 57.7 from 58.2, the sector's output price growth gauge was still strong by historical norms.

The cautiously optimistic tone, which included the highest output projections in three months for the composite index, went well with several other encouraging indicators for the mostly stagnant British economy.

(Sources: investing.com, reuters.com)