Global markets rise despite mixed signals in US and UK

The gains were made despite a survey which showed slowing growth in UK services activity and signalled that recovery in the wider economy is on course to slow in the third quarter.
The closely watched Markit/CIPS services purchasing managers' index slipped to 51.3 in August from 53.1 in July, which was the lowest level since April 2009 when the sector first returned to growth. Any number above 50 indicates expansion. It was a bigger fall than economists had predicted and reflected reports of reduced market confidence. It echoed the manufacturing and construction PMIs published earlier in the week, which also signalled a slowdown in recovery in those sectors.
Based on the three surveys combined, Markit said the UK economy was likely to grow by 0.5pc in the third quarter compared with the second, when gross domestic product increased by 1.2pc.
Chris Williamson, chief economist at Markit, said the services sector, which accounts for about three quarters of the UK economy, was struggling to sustain momentum after a buoyant second quarter.
"Confidence about the year ahead has failed to recover from June's record drop, with public sector spending cuts and the looming VAT hike in January creating uncertainty over the future direction of the economy," he said.
"While a double-dip recession remains unlikely, the survey suggests that the risk has increased and that growth looks set to be slow and choppy going forward."
Meanwhile in New York, investors voiced relief that the keenly-anticipated jobs report for August was better than many had feared. While the world's largest economy lost jobs overall, private employers actually hired 67,000 workers. And in another brighter note for markets that have endured a diet of poor economic news over the summer, the number of jobs created by the private sector in July was revised upwards to 107,000.
The recession cost 8.5m jobs in the US and the unemployment rate has remained stubbornly high, despite the economy having begun to grow again. "Double-dip fears will dissipate on the back of this result," said Rob Carnell, an economist at ING.
The recovery's loss of momentum over the summer has increased the pressure on President Barack Obama to do more to accelerate growth. With key Congressional elections just two months away, voters' approval of his handling of the economy is at a record low.
He insisted yesterday that there's "no quick fix" for the economy, but that he would be outlining a new set of measures next week that are designed to help. With unemployment the political flashpoint, they are reported to include a temporary suspension of a tax employers pay when hiring people.
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