The UK's services sector grew in May, the first expansion since a widely-followed index of business sentiment started to fall in April last year, reports the FT.

The CIPS.Markit Purchasing Managers' Index in May showed the largest one-month jump in its history, rising to 51.7 from 48.7, and registering the sixth consecutive rise. A reading above 50 indicates positive growth, said the FT.

Paul Smith, senior economist at Markit Economics, "Growth in May was supported by a gain in line with rising market confidence, although reports of competitive pressures and subsequent price discounting to support sales indicated that the business climate remained tough overall."

Separately, Markit noted that the All-Sector PMI, which includes services, manufacturing and construction and is weighted according to their respective contributions to economic activity, has also risen above the critical reading of 50 in May, said the FT.

That suggests that the UK is the first of the European economies to see a return to growth.

Roy Ayliffe, Director of Professional Practice at the Chartered Institute of Purchasing & Supply (CIPS), said: "The UK services sector has bounced back much quicker than expected demonstrating that it really is the engine of the modern economy. May saw the first growth in the sector for 13 months on the back of increased business activity and new orders.

"Against most economic predictions, May's PMI data suggests that the UK economy may come out of recession much sooner than was originally thought with construction, manufacturing and service sectors all showing significant improvement.

“However, it's far too soon to crack open the champagne - against a backdrop of ongoing price discounting and historically steep job shedding, there are risks that the recent improvements in service sector performance will not be sustainable."