UK"s liberation is "false dawn" Business

John Lewis will betray a clever set of formula subsequent week but the arch executive, Charlie Mayfield, warned that there would be no lapse to a consumer boom. Photograph: David Moir/Reuters

Britain"s presentation from the deepest retrogression given the fight was a "false dawn," and profitable the costs of the predicament would put the brakes on recovery, John Lewis"s chairman, Charlie Mayfield, warned today.

As a key consult of the services zone referred to a clever rebound last month, after wake up was vexed by the snow white continue in January, Mayfield told reporters at a sell discussion in London that there would be no lapse to the heady days of the consumer boom.

The upmarket tradesman had a successful Christmas, and Mayfield pronounced it would inform a "strong set" of annual formula subsequent week. But he warned that flourishing confidence about the opinion was misplaced.

"I think we"re in a bit of a fake dawn, I"m fearful to contend ... Getting out of the predicament has cost an eye-watering volume of income and we simply haven"t proposed to compensate the cost for that," he said. "Everyone wants to think it"s going to lapse to how it was dual years ago. It"s not going to happen."

His comments came after analysts seized on headlines that the monthly purchasing managers index (PMI), gathered by the Chartered Institute of Purchasing and Supply to magnitude service-sector activity, jumped to 58.4 in Feb from 54.5 in Jan – the strongest celebration of the mass in some-more than 3 years.

With services accounting for some-more than three-quarters of sum made at home product (GDP), City experts pronounced the upbeat celebration of the mass was acquire news, after a fibre of bad interpretation referred to the blizzards put the economy in to the low freeze in January.

"It"s a towering rise, that suggests the services zone in the UK is in bold health," pronounced David Page at Investec. The consult helped to progress the bruise on the unfamiliar exchanges. By the finish of the day, argent was up some-more than 1% opposite the dollar, at $1.51.

Vicky Redwood of Capital Economics pronounced that, together with clever expansion in production and building a whole last month, the services outturn forked to strong altogether expansion of 1% in the initial 3 months of 2010. "At the really least, the consult will ease concerns that the economy might have depressed behind in to retrogression this quarter," she said.

A certain entertain of expansion in the initial 3 months of the year would come as an measureless service to Downing Street. Statisticians are due to tell their initial comment of GDP for the initial entertain in late April, expected to be the center of a ubiquitous choosing campaign, and headlines of a "double dip" could stone Labour"s explain to have nursed the economy behind to health.

The sum of the PMI inform were additionally encouraging: a sub-index measuring new commercial operation increasing to 57.5 from 53.4, the top given Sep 2007. Job prospects additionally improved, with the practice celebration of the mass the top given the begin of the retrogression in open 2008.

But Colin Ellis, an economist at Daiwa Capital Markets Europe, cautioned opposite celebration of the mass as well most in to one month"s data, indicating out that PMI surveys had forked to a fast liberation in 2009 that never materialised. "The bottom line is that the PMIs have not been a quite great guide to wake up during the retrogression so far," Ellis said. The ultimate total for the last entertain of last year show that GDP expansion was 0.3% – stronger than initial thought, but still half the economy"s long-term normal rate.

The Bank of England"s nine-member financial process cabinet will finish the monthly seductiveness rate-setting assembly tomorrow. Few City experts design any shift from the position of "pausing" quantitative easing at £200bn, and keeping borrowing costs on hold at a jot down low of 0.5%.

"With a large mercantile retrenchment additionally in sight after the election, the UK economy is really not out of the woods yet," Ellis said, "and today"s interpretation is positively not a great reason for the MPC to shift financial process tomorrow."