By Jonathan Davies
The growth of the UK's services sector picked up pace in June, after falling to a five-month low in May.
The Markit/CIPS purchasing managers' index (PMI) rose to 58.5 in June, after uncertainty surrounding the general election dampened business activity in May.
Any figure above 50 indicates growth.
Markit said the index increased as a result of an influx of new business orders, with new product launches and commercial initiatives helping to pick up the pace of growth.
Job creation in the sector continued to grow at a strong pace, but Markit said backlogs of work fell to a six-month low.
Chris Williamson, Chief Economist at Markit, said: “While uncertainty caused by the Greek debt crisis rules out any imminent hike in interest rates, the post-election rebound in service sector business activity adds to the likelihood of the Bank of England starting to nudge rates higher later this year. The survey data are indicating an acceleration of economic growth to 0.5% in the second quarter, up from 0.4% in the first three months of the year.
“However, growth will have to accelerate further in the second half of the year to meet the Bank’s 2015 growth forecasts of 2.5%, and faster growth is by no means assured. Hiring and inflows of new business both slowed in June, and an escalating Greek crisis and ‘Grexit’ has the potential to destabilise economic growth.
“Growth is looking increasingly unbalanced. The recent weakness of the manufacturing PMI means industrial production looks likely to have declined in the second quarter, leaving the economy once again dependent on the service sector to sustain any growth."