The UK’s dominant services sector is on the up – are better economic times ahead?

The sector has seen the biggest boost to business activity in a year but there is still need for caution, argues James Moore

The UK’s service sector is looking increasingly robust (PA)

The UK economy has spent a long time in the doldrums but could it be that better times are ahead?

The CIPS UK Services Purchase Managers’ Index, which monitors the dominant part of the UK economy – service industries – leapt to 55.9 in April from 52.9 in March, representing the fastest rise in activity for a year. That figure is well above the 50, the mark that separates a growing sector from a contracting one.

S&P Global, which conducts the survey, found “buoyant demand for services”, which boosted “new orders and activity growth”. Hooray! Survey respondents, said the firm, often noted that stronger consumer spending was a factor boosting business activity during April. And there was more: “Resilient demand and rising optimism regarding the business outlook also resulted in a solid increase in employment numbers.”