March data pointed to a rebound in UK service sector growth, with business activity and incoming new work both rising at the strongest rates so far in 2017. Survey respondents also remained optimistic about the year-ahead business outlook, with almost half of the survey panel forecasting growth while only one-in-nine expect a fall in activity. However, intense cost pressures continued in March, which led to the fastest rise in prices charged by service sector firms since September 2008.

The headline seasonally adjusted Markit/CIPS Services PMI Business Activity Index picked up from 53.3 in February to 55.0 in March, and therefore above the 50.0 no-change value for the eighth consecutive month. Moreover, the latest reading signalled a marked increase in business activity and the fastest pace of expansion since December 2016. This signalled a marked rebound from the five-month low seen in February.