The UK private sector grew at the fastest pace in nine months in February, underpinned by another strong upturn in the services activity, flash survey results from S&P Global showed on Thursday.

The composite output index rose to 53.3 in February, while the score was expected to remain unchanged at 52.9.

A reading above 50.0 indicates expansion in the private sector. Higher levels of output have been reported in each month since last November.

“The survey data point to the economy growing at a quarterly rate of 0.2-3 percent in the first quarter of 2024, allaying fears that last year’s downturn will have spilled over into 2024 and suggesting that the UK’s ‘recession’ is already over,” S&P Global Market Intelligence Chief Business Economist Chris Williamson said.

Capital Economics Economist Alex Kerr said the mildest of mild recessions at the end of 2023 may soon be over. But lingering price pressures may continue to concern the Bank of England.

However, Kerr said the BoE will be in a position to start cutting interest rates this summer.

The services Purchasing Managers’ Index, or PMI, remained unchanged at January’s eight-month high of 54.3.

At the same time, manufacturing production decreased in each of the last twelve months. Nonetheless, the manufacturing PMI rose to a three-month high of 47.1 from 47.0 in January.

At composite level, new business volumes increased at the fastest pace since May 2023. This was largely due to a solid growth in new work received by service providers.

Firms remained cautious about adding new staff in February. Employment levels rose only slightly despite improving order books and rising business optimism.

Unfinished work fell for the tenth month in a row, suggesting a lack of pressure on operating capacity.

On the price front, the survey showed that average cost burdens increased sharply, at the fastest rate in six months largely due to higher labor costs.

Manufacturers said rising freight costs linked to the Red Sea crisis was the major factor contributing to higher purchasing costs.

There was a renewed acceleration in prices charged inflation across the private sector economy. The increase in output charges was the strongest since July 2023.

Business expectations rose for the fourth straight month in February. The level of optimism was the strongest since February 2022.