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Improved performance in the service sector

Economists say businesses should be reassured that contraction over winter will be short lived.

A survey has shown an unexpected growth in the services sector in December. The Markit/CIPS Purchasing Managers' Index (PMI) recorded a jump to 54 last month, up from 52.1 in November.

The same survey also revealed better than expected results for manufacturing and construction. The improved performance stopped the economy from contracting in the last quarter but analysts still predict that there will be no signs of growth in 2011 and remain unsure as to whether the British economy will be able to avoid recession in 2012.

The employment sector saw little change "edging only slightly higher following two months of marginal contraction," according to Markit economist Chris Williamson.