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The UK services sector continued to show strength, recording a figure of 54.9 in May according to the latest Markit/CIPS UK Services Purchasing Managers’ Index.
The reading, which is above the 50 mark indicating expansion, was the quickest rate of growth since March 2012, up from 52.9 seen in April.
The rise in activity was attributed to higher sales, new product launches and promotion, with some companies saying better weather supported growth.
There was further good news for purchasers, as cost inflation reached a one-year low, with lower fuel prices offsetting higher food and wage costs. Employment in the sector also grew for the fifth consecutive month.
“The biggest surge in new business for three years in the dominant services sector could trigger hopes that a recovery is finally here. This was underlined by the sharpest growth in activity in over a year and increased confidence for the year ahead,” said CIPS CEO David Noble.
Chris Williamson, chief economist at Markit, said: “The UK economy has moved up a gear with all cylinders now firing. For the first time in a year, manufacturing, services and construction sectors are all now reporting higher levels of activity.
“There’s good reason to believe growth can accelerate further. Across all three sectors, new business showed the largest jump for three years in May.”