The service sector activity jumped unexpectedly in March to show its fastest pace of growth in over a year.
The Markit/CIPS services PMI index, a measure of activity growth as reported by purchasing managers, surged to a 13-month high of 57.1 in March from an unrevised 52.6 in February, beating even the most optimistic analyst's forecast.
There is a question mark over the sustainability of the increase, however, as some firms reported benefiting from a spurt of public spending in March, the end of the last fiscal year before government spending cuts begin in earnest.
The 4.5 point rise in the index is the second-biggest increase since the survey started in 1996, and was only exceeded in January this year, when activity rebounded strongly after contracting due to December's unusually heavy snow.
Data company Markit said that based on March's figures it now believed British GDP grew 0.8 per cent in the first quarter of the year, up from a 0.5 per cent estimate after February's PMI data for the services, manufacturing and construction sectors.
City A.M. Reporter