UK service providers experienced a sustained rebound in business activity during April, supported by the fastest upturn in new work so far in 2017. Job creation also picked up to a four-month high, driven by renewed pressures on operating capacity. A strong pace of input cost inflation persisted in April, which contributed to the steepest rise in prices charged by service sector firms since July 2008. Meanwhile, service providers are confident about their prospects for growth over the year ahead, but the degree of optimism moderated for the third month running to its weakest since November 2016.

At 55.8 in April, up from 55.0 in March, the headline seasonally adjusted Markit/CIPS Services PMI Business Activity Index posted above the 50.0 no-change threshold for the ninth month in a row. The latest reading revealed the fastest upturn in service sector output since December 2016. The robust and accelerated rise in services activity was linked to resilient business-to-business demand, new product launches and, in some cases, another rise in sales to overseas clients.