The official data published here Friday, showed the UK service sector bounced back in July, raising hopes of an economic recovery in the third quarter of this year.
The Office for National Statistics (ONS) said in a report that services output, covering a range of sectors from retail to finance, rose 1.1 percent on the month.
However, this followed a decline of 1.5 percent in June which was affected by the extra Diamond Jubilee bank holiday.
The service sector accounts for about 75 percent of UK economic output (GDP).
Its performance is an important guide to the direction of the overall economy.
All the main areas registered increases in activity in July, with the category covering retail, hotels and restaurants showing the biggest rise of 1.
The data also showed that business services and finance output was up 1.2 percent.
The increase was predictable after the disruption to activity in June caused by the Jubilee celebrations.
There was an extra bank holiday for the Jubilee and the usual late May holiday was shifted to June.
A bounce back had been expected but the underlying trend for the services sector is positive, with activity increasing by 0.1 percent over the three months to July compared with the previous three months. Said the report Output is also up on the same period a year earlier.
The positive data from the services industries follow the upwards revision to the GDP figure for the second quarter. An initial estimate of a decline of 0.7 percent has been revised to 0.4 percent, with the decline in construction not as bad as first feared.
The July services figures give weight to the argument that GDP will rebound in the third quarter of this year. Some economists now expect growth between July and September to outweigh the loss of output in the second quarter. The Olympics effect, with ticket sales included in the third quarter GDP figures, is expected to help, as well as the postponement of output lost during the bank holidays.