The U.K.'s services sector rebounded in July, driven by solid recovery in new business, data from IHS Markit and the Chartered Institute of Procurement & Supply showed.
The seasonally adjusted U.K. services PMI Business Activity Index rose to 51.4 in July from 50.2 in June. A reading above 50 shows expansion, while one below 50 indicates contraction.
The consensus estimate of economists polled by Econoday for July was 50.2.
New business grew at the fastest pace since September 2018, while sales in external markets also improved in July.
"However, the overall picture is one of an economy that is only just managing to skirt recession, with July's performance among the worst since the height of the global financial crisis in 2009," said Chris Williamson, chief business economist at IHS Markit.
The growth in employment eased in July month over month, and backlogs of work dropped.
Business optimism in the sector fell for the second consecutive month in July amid domestic political uncertainty and global economic outlook concerns. The Conservative Party picked hardline Brexiter Boris Johnson to replace Theresa May as party leader and U.K. prime minister July 23. Johnson has said the U.K. must leave the EU by Oct. 31 "come what may."
The seasonally adjusted All Sector Output Index, which represents activity in the manufacturing, services and construction sectors, increased to 50.3 in July from 49.2 in June, as the services sector growth was partially offset by the drop in manufacturing production.