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U.K. Services GDP Increased by 1% in 3 Months to April

British service sector output increased by 1% in the three months to April versus the previous three months, official figures showed on Monday.

This followed growth of 0.9% in the three months to March and the Office for National Statistics said that all five components of the service sector increased output. Business services and finance exerted the biggest upward impact.

But service sector output in April alone fell 0.1% on the month though that still meant it was up 3.9% on the year. That was the first monthly fall since January.

The figures, however, are unlikely to alter expectations the Bank of England will raise interest rates later this week as it tries to rein in inflationary pressures.

The ONS said the monthly drop in services output reflected a 1.6% drop in distribution output -- the biggest decline since November 2003. Around 40% of the fall could be accounted for by lower car sales.

Output of hotels and restaurants fell 1.7% in April although this followed a strong March mainly on the back of contract catering, the ONS said.

Separately, the ONS released data on productivity which showed output per worker in the first quarter was up 2.7% on a year ago. That was the highest rate since the second quarter of 2004 and followed a 2.1% rate in the fourth quarter of 2006.