The services sector activity in the UK economy slowed its pace of expansion in the month of January, a fresh report from Markit Economics showed on Friday.

The services PMI stalled its run of improvements and fell to 54.5 in Jan versus a 56.2 reading booked in Dec. Markets predicted a drop to 55.8 in Jan.

Key Points:

Slowest rise in output since October

Strongest business expectations since May 2016

Input price inflation highest since March 2011

Chris Williamson, Chief Economist at Markit, noted: “Service sector growth eased after a strong end to 2016, but the January surveys still point to a buoyant start to 2017 for the UK economy. The PMI surveys are collectively signaling that GDP will increase by a robust 0.5% in the first quarter, if current growth is sustained in coming months. Encouragingly, optimism about the coming year has risen to its highest in one-and-a-half years, improving across the board in all sectors to suggest that January’s slowdown may only be temporary.”