The S&P Global/CIPS UK Services PMI scored 52.9 in March - any number above 50 is seen as growth, so this means the sector is growing, although at a slightly slower pace than in February, when the score was 53.5.

March's figure was boosted by the strongest expansion in new business in a year, and the best export performance since at least 2014 when the data series began.

The service sector accounts for almost 80% of UK economic output.

Tim Moore, economics director at S&P Global Market Intelligence, said: "March data confirmed that the UK service sector returned to growth during the first quarter of 2023, supported by a sustained rebound in new orders as business and consumer confidence improved from the lows seen last autumn."

The PMI survey showed an improvement in business expectations for the fifth consecutive month and optimism about business prospects being the highest since March last year.

Read more:
Survey shows improved confidence 'yet to translate into improvement of business conditions'
Co-op reports full-year profit

But there were still some clouds on the horizon, with some companies worried about rises in interest rates and corporation tax.