The UK economy looked set to grow faster this year than even optimists had expected after data on the services sector that one economist called 'show-stopping' today.

The sector, which accounts for 78 per cent of the economy, grew at its fastest pace in more than six years last month, suggesting overall growth in the third quarter will be higher than expected. The purchasing managers' index leapt to 60.2 in July from 56.9 in June, its highest level since December 2006.

'Although an early call on one month's data, the forward-looking elements from the survey point to a further strengthening of GDP in Q3 as the UK heads towards "escape velocity" and self-sustaining economic expansion,' said Paul Smith, senior economist at survey compilers Markit.