British services sector firms grew at their fastest pace in over a year in July as activity recovered after a public holiday hit business in June, official data showed on Friday.
Services output rose by 1.1 percent in July, the biggest gain since May 2011, after a 1.5 percent drop in June, the Office for National Statistics said. Output was 0.7 percent higher than a year earlier.
The services sector makes up more than three quarters of British GDP, and Friday's data suggests the economy made a strong start to the third quarter, after contracting by 0.4 percent in the second quarter of the year.
July's month-on-month rebound adds to strong growth in manufacturing, making it likely that the economy will leave recession after three quarters of contraction.
The bulk of ticket sales for the London Olympics will be booked in August, when the majority of events took place, though some are included in July's figures.
The ONS also reported that output per hour across all sectors of the economy fell 0.9 percent in the second quarter, contributing to a 2.6 percent fall in productivity over the previous year. Unit wage costs rose 2.0 percent on the quarter, while unit labour costs edged up by 0.3 percent, the statistics agency said.
Britain's weak productivity since the financial crisis has been a major puzzle for the Bank of England, and potentially poses inflation risks when the economy recovers.
The ONS also said that following new international guidance, it was reclassifying the remainder of banks Northern Rock and Bradford & Bingley owned by the government as central government bodies rather than public sector corporations, as they were no longer actively trading.
This means that they will add to general gross government debt, with knock-on impacts on the key measure of public sector net debt targeted by Britain's government, back-dated to 2010.
The ONS said the changes would push up government gross debt by 53.4 billion pounds in 2010/11, reducing to a 37.4 billion pound increase in 2011/12.
The change will also reduce the general government deficit by 740 million pounds in 2011/12. The changes will appear in public finances data from early 2013 onwards.
(Reporting by David Milliken and Sven Egenter)