* UK April services PMI falls more than expected to 54.3
* Prices charged index highest since September 2008
* PMI surveys point to 0.4 pct quarterly UK growth -Markit
By Peter Griffiths
LONDON, May 5 (Reuters) - Britain's dominant service sector grew less than expected in April after hitting a 13-month high in March, a survey showed on Thursday, suggesting the UK economy failed to pick up speed after its sluggish start to the year.
The Markit/CIPS headline services PMI index eased to 54.3 in April from 57.1 in March, staying in positive territory for a fourth straight month, but undershooting the 55.7 forecast.
The survey, taken with downbeat manufacturing and construction PMIs earlier this week, suggest GDP growth is running at a quarterly rate of just 0.4 percent, Markit's chief economist Chris Williamson said.
That is even lower than the sluggish 0.5 percent growth rate recorded in the first quarter after a shock contraction at the end of last year.
"The service sector suffered a sharp loss of growth momentum at the start of the second quarter," Williamson said. "The deterioration in the sector's performance can be largely linked to government spending cuts."
Britain's coalition government has staked its reputation on eliminating the budget deficit, which has swollen to 10 percent of GDP, by the time of the next election in 2015.
PMI surveys earlier this week showed manufacturing expanded at its slowest pace in 7 months in April and construction growth slowed sharply after two robust months.
TWIN DANGERS
Excluding December's snow-related drop, the services PMI headline index for April saw its largest decline since October 2008 and was blamed mainly on UK government spending cuts.
The services sector saw average prices charged rise in April, with the index jumping to 53.8 from 52.2 in March, its strongest reading since September 2008.
The figures underline the twin dangers of sluggish growth and high inflation facing the Bank of England as it prepares to announce its latest rates decision at 1100 GMT.
The bank is expected to keep borrowing costs at a record low of 0.5 percent. The European Central Bank raised rates in April for the first time since the financial crisis.
The BoE has so far resisted pressure to raise rates in order to try to curb inflation running at double its 2 percent target, opting to wait for signs of a more robust recovery.
A run of weak economic data has pushed back expectations of the first rate rise. Interest rate futures show chance of around 50 percent for a hike in September and a 25 basis point rise is not priced in until the end of the year.
The breakdown of the Markit/CIPS PMI survey gave a mixed picture for the service sector at a time of weak consumer confidence, government cuts and worries about the outlook.
New business grew at its fastest pace since March 2010 and the rise in input prices eased to its lowest in four months.
However, the business expectations index -- which measures the outlook for a year's time -- eased for a second consecutive month in April to reach its lowest since December. Firms gave government cuts and weaker public sector demand as the reason for their less optimistic outlook. (Editing by Stephen Nisbet)