LONDON (Reuters) – Britain’s dominant service sector grew less than expected in April after hitting a 13-month high in March, a survey showed on Thursday, suggesting the economy failed to pick up speed after its sluggish start to the year.

The Markit/CIPS headline services PMI index eased to 54.3 in April from 57.1 in March, staying in positive territory for a fourth straight month, but undershooting the 55.7 forecast.

The survey, taken with downbeat manufacturing and construction PMIs earlier this week, suggest GDP growth is running at a quarterly rate of just 0.4 percent, Markit’s chief economist Chris Williamson said.

That is even lower than the sluggish 0.5 percent growth rate recorded in the first quarter after a shock contraction at the end of last year.

“The service sector suffered a sharp loss of growth momentum at the start of the second quarter,” Williamson said. “The deterioration in the sector’s performance can be largely linked to government spending cuts.”

The coalition government has staked its reputation on eliminating the budget deficit, which has swollen to 10 percent of GDP, by the time of the next election in 2015.

PMI surveys earlier this week showed manufacturing expanded at its slowest pace in 7 months in April and construction growth slowed sharply after two robust months.

LONDON (Reuters) – Manufacturing grew at its weakest pace in seven months in April and a sharp slowdown in new orders cast a cloud over what has been a rare bright spot in the UK economy.

The Markit/CIPS manufacturing PMI headline index fell to 54.6, well below even the most bearish analyst’s forecast, suggesting the recent strong performance by British manufacturers is starting to weaken as domestic demand wanes.

The slowdown was likely to fuel speculation that the Bank of England will delay raising interest rates from the record 0.5 percent low even further as policymakers wait for the British economy to pick up after making a sluggish recovery at the beginning of the year.

“It does add further grist to the mill to the argument to keep interest rates on hold,” said Philip Shaw, chief UK economist at Investec. Sterling tumbled and gilt futures hit a contract high on Tuesday after the PMI release.

Interest rate futures show a 50 percent chance of a first post-crisis rate hike in September and a full 25 basis point increase is not priced in until January 2012.

Manufacturers blamed the fall in new orders on weakening domestic demand, although the survey also noted that the Japanese earthquake and tsunami in March caused a “sharp lengthening” in supplier delivery times.

“It’s unclear whether the drop in the index reflects a genuine slowdown in demand for manufactured goods or whether it reflects a degree of supply disruption arising from the tsunami in Japan in March,” Shaw added.

LONDON (Reuters) – Manufacturing activity grew less robustly than expected in April, at its weakest pace in seven months, and a sharp slowdown in new orders cast a cloud over what has been a rare bright spot in the UK economy.

The Markit/CIPS manufacturing PMI headline index, published on Tuesday, fell to 54.6 in April, its lowest since September, from a downwardly revised 56.7 in March and well below the 56.9 consensus forecast in a Reuters poll. Figures above 50 show expansion.

Although the output prices index eased to 64.2 in April from a record 65.2 in March, the inflation rate was still the third highest since the data were first collected in 1999.

The figures underscore the Bank of England’s plight as it struggles to tame inflation running at double its 2 percent target, while trying to protect Britain’s fragile recovery.

Official data last week showed the economy returned to growth in the first quarter, but at a sluggish rate that was weaker than forecast by the central bank.

Doubts about the strength of the UK economy have fuelled expectations the BoE will further delay raising interest rates from their record low of 0.5 percent.

Manufacturing has been one of the healthiest sectors of the UK economy since Britain emerged from a recession late in 2009. The PMI survey’s headline activity rate has stayed above the 50.0 mark that separates contraction from growth for 21 months.

LONDON (Reuters) – Manufacturing activity grew less robustly than expected in April, at its weakest pace in 7 months, and a sharp slowdown in new orders cast a cloud over what has been a rare bright spot in the economy.

The Markit/CIPS manufacturing PMI headline index, published on Tuesday, fell to 54.6 in April, its lowest since September, from a downwardly revised 56.7 in March and well below the 56.9 consensus forecast in a Reuters poll. Figures above 50 show expansion.

Although the output prices index eased to 64.2 in April from a record 65.2 in March, the inflation rate was still the third highest since the data were first collected in 1999.

The figures underscore the Bank of England’s plight as it struggles to tame inflation running at double its 2 percent target, while trying to protect Britain’s fragile recovery.

Official data last week showed the economy returned to growth in the first quarter, but at a sluggish rate that was weaker than forecast by the central bank.

Doubts about the strength of the economy have fuelled expectations Bank will further delay raising interest rates from their record low of 0.5 percent.

Manufacturing has been one of the healthiest sectors of the economy since Britain emerged from a recession late in 2009. The PMI survey’s headline activity rate has stayed above the 50.0 mark that separates contraction from growth for 21 months.

LONDON (Reuters) – They wore Kate and William face masks in Hong Kong, donned plastic tiaras and wedding dresses in Sydney and knocked back jugs of Pimm’s and roast beef served on red, white and blue plates in Paris.

As thousands packed the streets of London to celebrate the wedding of Britain’s Prince William and Kate Middleton on Friday, millions more around the world joined in the fun.

Royal-themed parties were held from Beijing to New York, while up to 2 billion people worldwide were expected to watch the wedding on television, the British government estimated.

In Australia, a Queen Elizabeth look-a-like greeted crowds glued to a large outdoor screen in Sydney and a Melbourne hotel offered “wedding guests” traditional British food and drink, such as Yorkshire pudding, gin and tonic and Pimm’s, a fruity alcoholic drink.

Sydney’s gays and lesbians held a same-sex royal wedding party, with guests enjoying slices of a giant wedding cake baked by Gaycakes and a gift bag containing a booklet on same-sex marriages.

In the former British colony of Hong Kong, which switched from British to Chinese rule in 1997, pubs and bars were decked out in Union Jack flags as live footage of the celebrations were beamed to champagne-sipping party-goers.

“It’s bigger than the World Cup final,” said Edward Stockreisser, a British expatriate watching the wedding with his fiancee. “We’re in an Irish pub in Hong Kong and everyone’s watching the TV…people really care about them.”

LONDON (Reuters) – They wore Kate and William face masks in Hong Kong, donned plastic tiaras and wedding dresses in Sydney and knocked back jugs of Pimm’s and roast beef served on red, white and blue plates in Paris.

As thousands packed the streets of London to celebrate the wedding of Britain’s Prince William and Kate Middleton on Friday, millions more around the world joined in the fun.

Royal-themed parties were held from Beijing to New York, while up to 2 billion people worldwide were expected to watch the wedding on television, the British government estimated.

In Australia, a Queen Elizabeth look-a-like greeted crowds glued to a large outdoor screen in Sydney and a Melbourne hotel offered “wedding guests” traditional British food and drink, such as Yorkshire pudding, gin and tonic and Pimm’s, a fruity alcoholic drink.

Sydney’s gays and lesbians held a same-sex royal wedding party, with guests enjoying slices of a giant wedding cake baked by Gaycakes and a gift bag containing a booklet on same-sex marriages.

In the former British colony of Hong Kong, which switched from British to Chinese rule in 1997, pubs and bars were decked out in Union Jack flags as live footage of the celebrations were beamed to champagne-sipping party-goers.

“It’s bigger than the World Cup final,” said Edward Stockreisser, a British expatriate watching the wedding with his fiancee. “We’re in an Irish pub in Hong Kong and everyone’s watching the TV…people really care about them.”

LONDON (Reuters) – British gilt futures suffered their biggest one-day drop in six weeks on Wednesday after data showed the UK economy returned to growth in the first quarter, although money markets still expect the Bank of England to hold fire on a rate rise next week.

GDP growth of 0.5 percent between January and March was in line with economists’ expectations and reversed a 0.5 percent decline at the end of last year.

However, there had been some speculation in markets before the release of the data that the figure would be weaker than economists expected, prompting a gilts rally late on Tuesday.

“There was a good run for prices ahead of the GDP number and today we’re seeing all of that given back and some more,” said Lloyds strategist Eric Wand.

“It has generated a bit of profit taking. There was a rumour going around beforehand that there was scope for a 0.3 percent reading, which got some of the doves’ hopes up.”

In anticipation of a weak number, June gilt futures hit a contract high of 119.27 before the data, but by the end of the session they had settled 70 ticks lower than Tuesday’s close at 118.37 — underperforming Bunds by almost 20 ticks.

That was the biggest one-day drop since March 17, when global fixed income prices tumbled as markets reassessed the severity of Japan’s tsunami.

LONDON (Reuters) – British inflation eased in March for the first time since last summer as grocers cut food prices, reducing the chance of a Bank of England rate hike in May and giving it leeway to support the still shaky economy.

The unexpected drop in annual inflation to 4.0 percent from 4.4 percent in February — together with a sharp decline in retail sales — gives ammunition to those policymakers who want to see the economy on a solid footing before tackling inflation.

Sterling fell and gilt futures extended an earlier rally that had been driven by speculation about a soft inflation number.

“It should help to stave off a rate rise in May,” said Philip Shaw, an economist at Investec. “But while this is welcome, this is just one battle in what will be a long tussle. It’s still possible inflation will rise to 5 percent over the course of the year.”

Economists at BNP Paribas pushed back their call for a first BoE rate increase from May to August, in line with markets which assign a probability of some 80 percent to an August move.

Last week, the BoE opted to hold rates at a record low of 0.5 percent, breaking step with the European Central Bank which raised rates for the first time since the 2008 financial crisis.

The British government is hoping that rates can stay low as its spending cuts — launched to reduce the large public deficit — have yet to take full effect.

LONDON (Reuters) – Retail sales fell at their fastest annual pace in nearly six years and house prices slipped in March, surveys showed on Tuesday, underlining the fragile state of the economic recovery.

Britain’s GDP shrank at the end of 2010 and growth this year is expected to be modest as public spending cuts, tax rises and high unemployment take their toll on consumer confidence.

The Bank of England, under pressure to cut above-target inflation, has kept interest rates at a record low of 0.5 percent for more than two years as it awaits signs that the economy is picking up speed.

The British Retail Consortium said like-for-like retail sales were 3.5 percent lower in March compared to a year ago, its biggest fall since April 2005.

Total sales, a measure which includes new floorspace, fell by 1.9 percent, the worst drop since the BRC began collecting the data in 1995.

“This is strong evidence of the pressure customers and traders are under,” said BRC Director General Stephen Robertson. “Uncomfortably high inflation and low wage growth have produced the first year-on-year fall in disposable incomes for 30 years.”

The trade body urged policymakers to delay raising rates, saying a hike “would do more harm than good”.

LONDON (Reuters) – March inflation data Tuesday is unlikely to offer the Bank of England respite from nagging questions over its ability to tame soaring consumer prices, and another surprise rise would fuel talk of an imminent rate hike.

The Bank held fire on rates last week, opting to wait for clearer signs of recovery before following the European Central Bank which raised the cost of borrowing for the first time after the financial crisis despite a much smaller inflation problem.

British annual consumer price inflation rate, due for release at 9.30 a.m., is forecast to hold steady at the 28-month high of 4.4 percent hit in February, more than double the central bank’s target.

But another unpleasant surprise looks possible, after the CPI numbers overshot the consensus in four of the last five months.

“The biggest upside risk has to be the feedthrough of oil prices,” said Hetal Mehta, economist at Daiwa Capital Markets. “The turmoil in the Middle East could have prompted a faster pass-through from producer prices to consumer prices.”

Rising food costs are also a risk and there may also be upward pressure on prices from firms that delayed passing on January’s 2.5 percent increase in the VAT sales tax.

Official data Friday showed factory gate inflation unexpectedly accelerated in March to its highest since October 2008 after strong rises in the cost of petroleum and food.