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Growth in the UK economy during September has eased the pressure on the Bank of England to reduce interest rates again, with some insiders saying it would be "unlikely" the Bank would act again this year. The announcement followed data from the Markit/CIPS services purchasing managers' index (PMI), which was "above economists' expectations" and comes on the back of rising activity in the services, manufacturing and construction sectors. However, deputy governor of the Bank of England, Ben Broadbent warned Brexit could still cause an "insidious" hit to the economy.
The prospect of more Bank of England action to support the economy this year after its post-Brexit vote stutter has widened, according to experts following the release of closely-watched data.

The Markit/CIPS services purchasing managers' index (PMI) showed expansion in September in line with that of the previous month.

The reading came in above economists' expectations and followed figures for the construction and manufacturing sectors earlier this week which also pointed to rising activity.

The survey for the service sector, which accounts for more than 75% of all UK output, showed new business expanded at its fastest rate since February - aided by the collapse in the value of the pound.

But it also raised the prospect of growing cost pressures through overseas purchases.

The findings were echoed by the deputy governor of the Bank of England, Ben Broadbent, who told an audience in London on Wednesday that while the pound's plunge was helping support UK growth, Brexit uncertainty could cause an "insidious" hit to the economy.

The Bank of England's policy action to bolster economic stimulus in August, including the cut in interest rates to 0.25%, has been credited with bolstering confidence and preventing a slowdown.

Commentators suggested it was unlikely the Bank would need to act again this year, unless conditions deteriorate significantly.

In a note to give its response to the PMI data, Capital Economics pointed to the likelihood of the new Chancellor loosening the purse strings in his Autumn Statement in a bid to prop up growth.

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Yael Selfin, head of macroeconomics at KPMG, said: "PMI figures for September show businesses have largely shrugged off the initial shock of the referendum results.

"Rising employment opportunities in the service sector should keep consumers spending while manufacturing industry is enjoying the benefits of a weaker pound."

David Noble, group chief executive at the Chartered Institute of Procurement and Supply, said the PMI results would bring much-needed cheer to policymakers.

"Though the overall activity index still remained below its long-term average and had dipped slightly compared to August, it reflected a modest revival of fortunes for services businesses," he said.