Fears of a double-dip recession have eased after news of expansion in the UK service sector.
The purchasing managers' index (PMI), a key measure of activity in the service sector, rose to 58.4 in February, beating analysts' expectations of around 55. Any figure about 50 represents expansion.
The service sector is thought of as a particularly good representation of the state of the economy at large. The jump seen in February represents the biggest increase seen in the index for over 10 years. Much of the increase can be attributed to increases in new business activity - another important marker of economic improvement.
Sterling also saw improvement on the back of the news, rising back above $1.50. The currency had taken a beating in the past few days as traders mulled the possibility of a hung parliament.
But concern continues about the potential for a 'double-dip' recession. Many bearish analysts are predicting that the UK is now at the mid-point, but will see further contraction later in the year.
