The Markit/CIPS Purchasing Managers’ Index® (PMI®) for the services sector showed confidence at highest level since March 2010.
Employment continued to rise this month as the index posted at 58.8, down from November's 60.0.
CIPS Group CEO David Noble commented: "The UK services sector continues to hit the high notes as business confidence surged to its highest level in nearly 4 years. The average new business growth rate in the final quarter of 2013 was the best in the survey's history, suggesting a very bright outlook for 2014. The stronger positive outlook also offers a platform for investment and expansion in new products and marketing, sustaining the continued broad based recovery in the New Year.
"New orders and backlogs rose firmly in the final month and will be leading the growth in activity at the start of the year. To sustain this expansion, firms have sought to increase staffing numbers for a twelfth successive month.
"Cost pressures, especially utility and energy prices, remained high in December but compared to previous times and given the upturn in activity, service providers have found confidence to push their own prices up to protect their margins."