The services sector has recorded its strongest growth in two years, according to the latest CIPS-Markit Index.

The index posted a 26-month high reading of 56.9 in October, up from 55.3 in September.

Service providers are confident on prospects for the economy but not as confident as in September, with some respondents expressing concern over price discounting and expected public sector spending cuts.

David Noble, chief executive at the Chartered Institute of Purchasing & Supply (CIPS), says: “The service sector is pulling the UK economy out of recession as its own recovery accelerates. Not only have we seen the sector expand for six consecutive months, but the latest growth was the strongest recorded in over two years. Given that the PMI Services survey accounts for almost 40% of the UK economy, this bodes well for wider market pick-up.”

Gary King, director at hospitality recruiter Collins King & Associates, told Recruiter: “We are starting to see the market turn. Chef vacancies have increased dramatically. The hotel market is starting to recruit again. We have done our first bit of recruitment for the hotel market for a year or so.

“Business is starting to return but clients want to get the best deal so there is a lot of discounting. It is challenging.”

Sam Lucking, retail recruitment consultant at ROC Recruitment, adds: “We are working on a lot of store recruitment at manager/assistant manager level. Demand is nowhere near what it was. There is a lot more contract and maternity recruitment. It has an impact because clients are saying if we can’t take this person on permanently, we will take them on a contract basis.”