Business activity growth in the service sector of the U.K. picked up from June's four-month low in July, final IHS Markit/CIPS purchasing managers' data showed Aug. 3.
The headline services purchasing managers' business activity index stood at 53.8 in July, 0.4 point higher than in June.
The rate of expansion was relatively subdued and reflected weaker rises in new work compared with those seen earlier in the year, IHS Markit said. The pace of job creation, however, edged up to its strongest level in 1.5 years.
In July, the rate of input price inflation was higher, but still below February's 102-month peak. Output price inflation also edged up from June's 11-month low.
"The service sector PMI indicates that businesses remain in expansion mode despite heightened uncertainty about the outlook, but also highlights how the risks to future growth remain firmly biased to the downside," Chris Williamson, chief business economist at IHS Markit, said.
Service providers' business expectations for the coming year were among the lowest recorded since late 2012 as Brexit-related uncertainty continued to weigh on their growth prospects for the year ahead.
"The subdued level of business optimism suggests it's likely that growth will at least remain modest and could easily weaken in coming months," Williamson added.
Duncan Brock, director of customer relationships at the Chartered Institute of Procurement & Supply, said: "The services sector offered a hesitant start to [the third quarter], with only marginally faster growth, a muted level of new orders and subdued business confidence.
"Purchasing managers cited continuing ambiguity around Brexit and the concerns about the strength of the economy as responsible for the sector's damp performance as consumers and businesses alike were hesitant about spending."