The UK appears to have dodged another recession after stronger than expected growth in the powerhouse services sector in March.

The closely watched Markit/CIPS survey, in which a reading of above 50 represents growth, showed activity in the sector increased to 55.3 in March.

This was up from 53.8 in February and outstripped expectations of 53.4. 

The acceleration was accompanied by an increase in jobs and reports of an improved economic climate.

It means the sector's activity in the first three months of 2012 grew at its fastest pace since the second quarter of 2010.

Markit chief economist Chris Williamson said the strong services data, which followed improving manufacturing and construction reports earlier this week, suggests the economy may have grown by as much as 0.5% in the first quarter of 2012 after a 0.3% contraction at the end of 2011.