03 November 2006 | Rebecca Ellinor

Growth in the UK services sector made a marked improvement in October, showing its strongest performance since April.

The latest CIPS/RBS purchasing managers' index (PMI), in which a reading above 50 indicates growth, recorded 59.3 in October, up on September's figure of 57.0 but below April's peak of 59.7.

The growth was fuelled largely by increases in sales and marketing.

The drop in fuel prices meant input price inflation fell to its lowest level since July 2005. Average input prices index came in at 57.4, lower than September's figure of 61.0.

The overall increase in business activity and in the sector's business confidence for the next 12 months led again to a rise in staffing levels as companies tried to meet backlogs of work.

The new business index posted a reading of 59.1 and the service sector business expectations index rose from 73.1 in September to 75.5 in October.

The outstanding business index recorded a reading of 52.5, the highest for six months.

Coverage of previous months' PMI reports is available at www.supplymanagement.com/pmi

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