China's services sector expanded at a faster clip in August as new business orders picked up, pointing to renewed strength in a key part of the world's second-largest economy. Euro zone business activity also remained robust in August, surveys showed, but Britain's economy is losing momentum as worries about Brexit mount. David Pollard reports.
With Brexit in the wind, so is change for an increasingly buffeted UK economy. Services the latest sector to struggle ... New readings for August put activity at 53.2 - the lowest in nearly a year. In contrast to Britain's euro zone trading partners - where strong readings set the scene for more growth. And put markets on guard for a rollback in ECB monetary stimulus. If with one important caveat .... (SOUNDBITE) (English) CMC MARKETS ANALYST, MICHAEL HEWSON, SAYING: "There are concerns about the strength of the euro .... Simply speaking companies don't have the hedges in place to mitigate against price rises or currency appreciation of that magnitude." Put another way, a sharp 13 per cent rise in the euro versus the dollar this year will make exports more expensive ... And could choke off a recovery. Though demand from another major trading partner, China, is also getting stronger. Its services reading hit a three-month high in August. Welcome news for an economy trying to shift away from a reliance on heavy industry and investment. (SOUNDBITE) (English) CMC MARKETS ANALYST, MICHAEL HEWSON, SAYING: "The key test will be the data that we've got coming out next week in the form of industrial production and retail sales. We have seen a little bit of slowing in terms of exports and imports in recent months. But ultimately I think the picture does look fairly stable." This week puts the ECB centre stage. And the spotlight on what hints its president could give on the timing for any unwinding of QE. (SOUNDBITE) (English) CMC MARKETS ANALYST, MICHAEL HEWSON, SAYING: "I think the ECB will want to dial back on expectations that they're going to outline plans for a tapering program much before the October meeting and I think they could announce further details or the real major details as late as the December meeting." Or during a European winter which could see the euro get even hotter - but prospects for the UK chillier still.