The Strathearn Restaurant at the Gleneagles Hotel in Perthshire, Scotland. The purchasing managers’ index (PMI) staged its biggest gain in more than a year. Image Credit: Reuters

London: Growth in Britain’s services sector rose sharply last month, pointing to a speeding up of overall economic growth in the first three months of 2015, financial data company Markit said on Tuesday.

Adding to a run of positive economic news before a May 7 national election, the Markit/CIPS services purchasing managers’ index (PMI) staged its biggest gain in more than a year to hit an eight-month high of 58.9 in March. The index had stood at 56.7 in February.

“The UK economy moved up a gear in March,” said Chris Williamson, chief economist at Markit. “Faster growth of new business and improved expectations of prospects for the year ahead also bode well for the upturn to retain strong momentum as we move through the spring.” Britain’s gross domestic product probably rose by a quarterly 0.7 per cent in the first three months of 2015 — up from 0.6 per cent growth late last year, Williamson said.

That forecast matched one from the Confederation of British Industry published earlier on Tuesday.

Official first-quarter GDP figures are due out the week before the election, and an acceleration of growth could boost Prime Minister David Cameron as he tries to convince voters that only his Conservative Party can bring prosperity.

The Markit and CBI forecasts contrast with the gloomier assessment of some private-sector economists who last week warned of a likely slowdown in growth following a fall in the official measure of services output for January.

The rise in March’s services PMI beat economists’ forecasts in a Reuters poll, which called for a much more modest rise to 57.0, and followed a strong reading on the equivalent manufacturing survey last week.

Markit said the optimism of firms in its survey — which does not include retailers or public-sector services — was the highest since May last year.

Hiring continued at a rapid pace, while firms’ costs rose more slowly than average.

“The combination of fuller employment and falling prices should support economic growth by providing an important catalyst to higher consumer spending, on which the upturn appears to have become increasingly dependent,” Markit said.

British firms have often struggled to boost exports in the face of weakness in the Eurozone, contributing to its current account deficit reaching a record 5.5 per cent of GDP last year.

Business investment has also only recently started to pick up.