(Alliance News) - The UK's service sector expanded in July, with the end of the general election period helping boost confidence, new data from S&P showed on Monday.

The seasonally adjusted services PMI business activity index posted 52.5 in July, a slight increase from June's 52.1. This was ahead of a flash estimate of 52.4.

S&P said that this signalled a modest but accelerated pace of expansion in output levels across the UK's service sector. This also marked the first time since April that growth has accelerated.

The composite output index came in at 52.8 points in July, up from 52.3 in June. This was ahead of a flash estimate of 52.7.

"With the general election period coming to an end at the start of July, survey data for last month showed the UK service sector enjoyed a modest rebound after a fairly subdued end to Q2. The Business Activity Index crept up only slightly, but the New Business Index jumped by over three points to its highest level in 14 months as firms reported an influx of new clients and contracts." said Joe Hayes, principal economist at S&P Global Market Intelligence.

"July's accelerated expansion in sales activity crucially suggests business and consumer confidence has improved, and albeit only one month into the second half of 2024, the latest survey results bode well for a reasonable GDP growth print in Q3."

On Thursday, survey results showed that the UK manufacturing sector strengthened in July.

The S&P Global UK manufacturing PMI rose to a two-and-a-half year high of 52.1 points in July, from June's tally of 50.9. It also topped the flash estimate of 51.8 points.

The services PMI is compiled by S&P Global from responses to questionnaires sent to a panel of around 650 service sector companies in the UK. The responses were collected between July 11 and 29.

By Sophie Rose, Alliance News senior reporter

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