Britain's services sector enjoyed its strongest growth since 1997 as new business flowed in at a record pace last month, according to the latest survey to suggest the recovery is strengthening.
The closely watched Markit/CIPS UK services PMI beat City forecasts to jump to a headline activity reading of 62.5 in October, from 60.6 in September. The forecast was for a slight slowdown to 59.8.
The index for new work was the highest since records began in 1996 and companies took on new staff at the fastest pace since 1997, according to the survey of a range of businesses in Britain's dominant service sector such as transport, IT and restaurants.
The report follows upbeat news in recent days on the smaller construction and manufacturing sectors in sister PMI surveys and is likely to raise expectations that the UK economy can keep up its recent pace of growth.
Chris Williamson, chief economist at survey compilers Markit, said the reports suggested growth would accelerate further in the final quarter of this year.
"The UK economic recovery moved up a gear again in October, with the PMIs indicating record growth of output and employment," he said.
"Historical comparisons of the PMI against gross domestic product suggest the latest survey data are consistent with a 1.3% quarterly rate of GDP growth, up sharply from previous quarters."
The latest official data put GDP growth at 0.8% in the third quarter. Some economists have questioned whether that can be matched in the final months of the year, especially given the pressures on consumers from soaring bills and slow pay growth.
But Markit suggested that pressures on consumers from the tough labour market were easing with the surveys signalling the private sector is creating more than 100,000 jobs per quarter.
Economists said the recent run of mostly upbeat indicators would likely prompt the Bank of England to raise its outlook for growth when it publishes its latest forecasts next week.
James Knightley, economist at ING Financial Markets, said the survey cast doubt over the Bank's outlook for unemployment. Policymakers have said that they will not raise interest rates from their record low at least until the jobless rate falls to 7%, barring various knock-out clauses being triggered.
"Taking all of the PMIs together, the composite reading is suggesting that fourth quarter GDP growth could rise as much as 1.5% - equivalent to around 6% annualised growth," said Knightley.
"It is difficult to believe that any other major economy will come close to that in the fourth quarter so sterling is likely to remain strong, particularly against the euro. It will also inevitably lead to further questions over whether the Bank of England seriously believes that it will be three years before the unemployment rate falls to 7%. We still think interest rates could rise in early 2015."
But Alan Clarke, economist at Scotiabank, questioned how much markets and policymakers should read into Tuesday's report.
"The survey feels a bit frothy," he said.
"No doubt conditions are robust, improving and better than thought at the start of the year. But I am a little wary that the hard data lives up to what the surveys suggest they should be doing."
Experts have also questioned the sustainability of the UK's recovery, arguing the government's much espoused rebalancing towards manufacturing and exports is a long way off.
The National Institute of Economic and Social Research (NIESR) said this morning that while it expects growth to pick up from 1.4% this year to 2% in 2014, the economy will remain over-dependent on squeezed consumers.
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