A positive balance of British services firms reported a rise in profits for the first time since November 2015 during the three months to February, according to a quarterly survey by the Confederation of British Industry.
A positive balance of 8% of business and professional services firms were in the black, while the consumer services segment reported a balance of 14%. Price growth is expected to accelerate in both sub-sectors in the coming quarter, the CBI said.
Growth in business volumes at business and professional services firms accelerated, with a balance of positive 14%, and is expected to increase further in the three months to May. At consumer services firms, the balance in business volumes rose to 32%, from negative 20% in the prior quarter.
Average selling prices in the consumer services segment rose but at a slower pace, while those in the business and professional services sub-sector remained relatively unchanged. Price growth in both segments was expected to pick up in the three months to May.
Investment plans in both segments were mixed amid uncertainties surrounding the U.K.'s post-Brexit trading relations with the EU.
"Belonging to a comprehensive customs union would go a long way to allaying these concerns, thus alleviating some of the uncertainty weighing on investment and expansion plans," said Rain Newton-Smith, the CBI's chief economist.