The UK services sector grew slightly more than expected in May after hitting a 38-month low in April, a survey released on Friday (3 June) by Markit Economics showed.
The business activity index rose to 53.5 last month, rebounding from April's 52.3 reading, which was the lowest figure recorded since February 2013, and slightly above expectations for a 52.5 reading. May's reading means activity in the services sector has risen every month since January 2013, although Markit warned the rate of growth remained way below the 55.6 average recorded since the index was introduced in 1996.
The subdued pace of growth provided further indication the UK economy suffered a significant slowdown in the second quarter of 2016, amid growing uncertainty surrounding the outcome of the European Union referendum.
"The PMI surveys show that the pace of economic growth remained subdued in May, as 'Brexit' worries exacerbated existing headwinds. The data so far indicate that the second quarter is likely to see the economy grow by just 0.2%," said Markit's chief economist Chris Williamson.
"Growth has collapsed in manufacturing and construction, leaving the economy dependent on the service sector to sustain the upturn, though even here the pace of expansion has remained frustratingly weak so far this year."
However, 51% of the firms surveyed said they had so far been unaffected by the prospect of Britain leaving the EU, while 28% of service providers reported a detrimental overall impact and a further 9% stated a 'strongly detrimental' effect.
The report added the increase in total activity came despite new business growing at the slowest rate of the current 41-month sequence of expansion, while volumes of outstanding business fell for the second month running.
The decline marked the first back-to-back drop in the category in over three years.