THE service industries grew last month for the first time in more than a year, according to a key economic survey published last week. The CIPS/Markit survey of purchasing managers climbed over the 50-points mark for May, reaching 51.7, its highest level since April 2008. A score of 50 is the point at which contraction turns into expansion. It is the sixth consecutive month that the survey score has increased. Services account for about three-quarters of the UK economy.

There were signs that the worst of the crisis in the housebuilding sector could be behind us. The National HouseBuilding Council said that it had noticed a rise in applications for the construction of homes. Similarly, the Home Builders Federation, a trade body, said that its members are more optimistic about the outlook than at any time for the past few months. However, both organisations were at pains to stress that they are not yet willing to signal the start of the recovery and that activity levels are still sharply down from last year.

The Bank of England decided to hold the interest rate at 0.5% and maintained the £125 billion ceiling on its quantative easing (QE) programme. Analysts were nonplussed. Ian McCafferty, the CBI’s chief economic adviser, said: “There are some encouraging, if tentative, signs that the QE programme is reducing the downside risk to the economy, but monetary and lending conditions remain fragile.”

Australia became the latest national economy to show positive movement. Official data revealed that the country’s gross domestic product (GDP) rose 0.4% in the three months to the end of March, compared with a 0.7% contraction in the final quarter of 2008. It was a better performance than expected - analysts had been forecasting a 0.2% decline.

Explore Economics

• Pre-Budget Report 2009

• Budget 2009

• World Economic Forum

• The Times MPC

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive