Services

By THIS IS MONEY
Updated:

 

The Daily Mail City team explains what's going on with the all-important services sector.

What sort of services?

The sort that make the economy tick.

Things like bus and train companies, hairdressers and estate agents, cinemas and funeral directors, hotels and restaurants, banks and insurers, telephone and broadband providers.

Rather than making or building things, these companies provide services.

What about them?

Well, the services sector makes up three-quarters of the British economy so it is very important for growth, jobs and taxes.

Manufacturing represents just a fraction of this.

How are they getting on?

Okay, but not much more than okay.

The services sector was the driving force of the economy before Gordon Brown's debt-fuelled boom turned to bust.

Output slumped in the recession, recovered strongly last year, but dipped again in December. It is growing again now but at a fairly muted pace.

Oh dear

Yes, the news isn't great, but it is far from a disaster.

It looks like Britain has avoided a double-dip recession: in other words, the economy is on course to grow again in the first quarter of 2011 having contracted by 0.6% in the final quarter of last year.

And much of the growth is coming from manufacturers exporting goods abroad. This is the sort of growth Britain needs to 'rebalance' the economy.

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