A surge in consumer spending boosted activity in the UK's vital services sector as hotels, bars and restaurants enjoyed the biggest leap in trade for nearly six years, according to new figures.
The CBI's quarterly services sector survey showed output from the powerhouse services sector – which accounts for around 77% of the wider economy – improved in the three months to May after a sharp turnaround from consumer-facing businesses offset stalling progress among business and professional firms.
Trade across hotels, bars, restaurants, and travel and leisure firms rose at the fastest pace since August 2007, while soaring confidence saw the biggest quarterly increase in optimism among consumer-facing firms for more than 13 years.
Despite activity remaining broadly flat for accounting, legal and marketing companies, the outlook also looks brighter for these firms as optimism increased at its fastest rate since February 2010.
The survey is the latest positive indicator for the UK economy after the Bank of England upped its growth forecast earlier this month. The resurgent services sector helped Britain avoid a triple-dip recession, with growth of 0.6% spurring on a 0.3% rise in overall gross domestic product in the first quarter.
The CBI surveyed 170 firms between April 26 and May 15.