While the service sector recorded strong growth in July, the UK’s economy is likely to continue to see a “weak pace of growth” for the rest of 2011, according to Teodor Todorov, economist at Centre for Economics and Business Research.

Today’s research from the Chartered Institute of Purchasing and Supply (CIPS)/ Markit shows the services purchasing managers Index (PMI) posted a reading of 55.5 in July, the highest since March. A PMI value above 50 indicates that the sector grew, while a value below 50 suggests a contraction, so the latest data points to an acceleration in total service sector activity.

Todorov says: “New business is continuing to rise at a faster pace as the PMI value for new business increased from 54.0 to 55.6. However, service sector employment contracted, and prices have been rising more slowly for the past four months, July’s reading of 50.3 indicating steady prices as pressures on margins increase.

“Although today’s numbers are promising, the weak pace of growth for the economy is expected to continue through 2011. The ongoing uncertainty in the Eurozone is expected to impact negatively on consumer confidence, as UK 10-year bond yields hit record lows yesterday.”