Growth in Britain's dominant services sectors dipped in January as lingering concerns over the UK's withdrawal from the European Union continued to sap demand.
While optimism remained in the sector, with growth in new orders increasing at a slightly quicker pace in January, the overall rate of expansion was slower than seen during most of 2017, the UK's purchasing managers reported.
Purchasing manager index (PMI)
The headline IHS Markit services PMI fell to 53 in January, down from 54.2 in December and missing forecasts of a rise to 54.3.
Although the index dipped, it remained above the 50 level that indicates growth. The higher the index rises above the 50 level, the stronger the implied rate of economic growth.
Hiring continued at a robust pace, suggesting a positive pipeline of new projects and positive output expectations, Markit said.
"Indeed, services firms remained optimistic that business activity will be higher over the course of the year, with business confidence the strongest since last March," the report said.
Cost burdens from higher prices for fuel, insurance, transport and food, lifted input costs, but at their slowest pace since September 2016, suggesting inflationary pressures were beginning to ease.
However, selling prices remained elevated by companies' attempts to protect profit margins.
“The softer service sector growth follows news of the manufacturing upturn losing momentum at the start of the year and a near-stagnant construction sector," said Chris Williamson, economist at IHS Markit.
Paul Hollingsworth at Capital Economics remained upbeat, however. He said: "With inflation set to drop back this year, consumer services firms in particular should benefit from an improving backdrop for household spending."
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, examined the data's relevance to the Bank of England's current interest rate policy stance.
He said: "The data should prompt investors to reassess their view that the chance of the Bank raising interest rates again as soon as May is as high as 50%.
"[The data] strengthen the case for the Bank to take a lengthy pause before raising interest rates again; we see the next hike coming in August."
The FTSE 100, along with most of Europe's equity indices, was down on Monday, falling 1.1% in mid-morning trade.
The pound was broadly flat, up a shade against the dollar to $1.4119, but down a similar small fraction versus the euro at £0.8825.