In December, UK services PMI improved for a second consecutive month. The headline index rose from 52.1 to 54.0, the highest level since July, while a weakening in sentiment was forecasted. Both activity and new business rose at the strongest pace since July, while employment was little moved after two months of marginal contraction. Still worrying is however the pressure on margins as input costs rose at a marked and accelerated pace, while output prices were little moved. This outcome suggests that the UK services sector ended the year on a strong footing. Markit expects the services sector to have expanded by around 0.3% - 0.4% in the fourth quarter, enough to offset the contraction in the manufacturing sector. The outlook for the new year remains however uncertain.