British service sector activity declined by 0.4 percent October, giving back more than half of the previous month's chunky 0.7 percent rise, official data showed on Thursday. The Office for National Statistics said half of the drop was accounted for by a drop in the "government and other services" category, reflecting the start of what is expected to be a prolonged austerity campaign.
It was the biggest monthly decline in services activity since April. However, monthly numbers are volatile. Comparing the three months to October with the previous three months, services output rose 0.6 percent, just ahead of the 0.5 percent rise registered for September. The data offer the first official glimpse of how the biggest sector of Britain's economy fared in the fourth quarter of the year. The ONS also reported that productivity across all sectors of the economy rose 0.1 percent in the third quarter, lifting the annual rate of growth to 1.7 percent, its highest sin ce the third quarter of 2007.