UK service providers saw the fastest expansion of business activity for eight months in June.

It continued the recovery in growth seen since March's snow-related disruption. The latest upturn in service sector output was supported by the strongest increase in new work since May 2017.

However, the rate of job creation remained only modest in June, reflecting difficulties recruiting additional staff and, in some cases, efforts to reduce operating expenses.

The seasonally adjusted IHS Markit/CIPS UK Services PMI® Business Activity Index posted 55.1 in June, up from 54.0 in May, to remain above the 50.0 no-change mark for the twenty-third consecutive month.

The latest reading signalled the strongest rate of expansion since October 2017.

Survey respondents commented on a general upturn in client demand, particularly for business and financial services. There were also reports that unusually favourable weather conditions had boosted consumer spending.

Mirroring the trend for business activity, latest data revealed a robust and accelerated rise in new work received by service providers.

Chris Williamson, chief business economist at IHS Markit, which compiled the survey, said: "Stronger growth of service sector activity adds to signs that the economy rebounded in the second quarter and opens the door for an August rate hike, especially when viewed alongside the news that inflationary pressures spiked higher.

"The survey data indicate that the economy likely grew by 0.4% in the second quarter, up from 0.2% in the opening quarter of 2018. The sharp rise in business costs, linked to surging oil prices and the need to offer higher wages, suggests inflation will also pick up again from its current rate of 2.4%.

"It remains encouraging yet also surprising that current business activity continues to show such resilience amid relatively moribund confidence regarding the year ahead outlook. The survey once again highlights how the business outlook remains clouded by widespread concerns about the impact of Brexit uncertainty in particular."