Investing.com - Activity in the UK service sector accelerated at the fastest pace since October 2017 in June, according to a closely watched business survey released on Wednesday.
Research firm Markit said its services purchasing managers’ index rose to 55.1 in June from 54.0 in May, compared to forecasts for a reading of 53.9.
The expansion indicated that the recovery in growth since March’s snow related disruption is continuing. The upturn in service sector output was supported by the strongest increase in new work since May 2017, the report said.
But the rate of job creation remained modest in June, holding close to the 13-month low seen in April.
The report also showed that inflation intensified in June. Companies pointed to higher fuel bills and staff salaries, which resulted in the fastest rate of prices charged inflation since March.
"Stronger growth of service sector activity adds to signs that the economy rebounded in the second quarter and opens the door for an August rate hike, especially when viewed alongside the news that inflationary pressures spiked higher,” said Chris Williamson, chief business economist at survey compiler Markit.
A similar survey of the manufacturing sector on Monday showed that activity continued at a steady pace in June, but worries over U.S. trade policy and Brexit saw business optimism fall to a seven-month low.
Another report on Tuesday showed that activity in the UK construction sector accelerated to a seven month high last month.