Britain's services sector expanded in April at its fastest pace in more than two years and companies raised prices at their quickest in nearly that long, a key report showed today.
The Chartered Institute of Purchasing and Supply/RBS data, which are closely watched by the Bank of England's Monetary Policy Committee, will cement expectations that an interest rate cut is not likely later today or any time soon.
CIPS/RBS said its business activity index jumped to 59.7 last month from 57.4 in March, the highest since January 2004 and the second highest since mid-1997 when the service sector was booming.
It was also well above the 57.6 expected and the 50 mark separating expansion from contraction.
New business growth was also the strongest in two years, suggesting that services activity will be robust in coming months and that a pick-up in gross domestic product growth forecast by the MPC is now under way.
Business expectations also improved, with the expectations index climbing to 74.3 in April from 72.9 and offering some hope that a recovery in business investment which so far has been elusive could also be at hand.
