Britain's services sector grew in November at its strongest pace in three months, driven by brisk incoming new business and the fastest pace of new hiring in more than three and the half years, a survey showed yesterday.

The figures are the latest evidence to suggest the economy has sprung out of a softer patch seen in the third quarter and lent further support to the view that it is too early to call a peak in British interest rates at 4.75 per cent.

The Chartered Institute of Purchasing and Supply/Reuters index of service sector business rose to 56.7 last month from 56.3, defying expectations for a fall to 55.8. It remained well above the 50 mark which separates expansion from contraction.

"The third quarter downshift looks like it's fading into history rather than a fact of life that's continuing into the fourth quarter," said Malcolm Barr, UK economist at JP Morgan Chase. "It's a stretch to push the reacceleration story too far, though, because the eurozone area is looking very murky."

Indeed, the figures stood in sharp contrast to similar data from the eurozone, which showed services sector growth there at a 15-month low as new business growth neared stagnation.

Back-month short sterling interest rate futures fell sharply across the strip as the data supported the view that rates could climb again in future months, although economists are unanimous in predicting that rates will remain steady next week. That move in financial markets came despite news earlier yesterday from the Halifax that showed the second straight month of falls in British house prices in November.

The quickest pace of incoming new business since July, particularly in transportation and financial services, prompted an even snappier pace of hiring and pushed the employment sub-index up to 53.8, its highest since March 2001.