Source: Sharecast
The S&P Global flash UK PMI composite output index was 50.7 in June, up on May’s 50.3 and staying above the 50.0 benchmark. It was also marginally ahead of consensus expectations of 50.5.
A reading below 50.0 suggests contraction, while one above it indicates growth.
Within that, the services PMI business activity index rose to a three-month high of 51.3.
Manufacturing remained in contraction. However, the output index increased to 47.1, while the flash PMI edged up to 47.7 from 46.4 in May, a five-month high.
Overall, new business volumes returned to growth - ending a six-month run of contraction - driven by the service economy. Inflationary pressures also eased.
However, manufacturers posted another export-led decline in order books, as Donald Trump’s trade war, mounting geopolitical tensions and global price competition continued to weigh on demand.
Business expectations across both sectors for the year ahead also weakened, on the back of ongoing global economic and political uncertainty.
Chris Williamson, chief business economist at S&P Global Market Intelligence, said: "The UK economy remained in a sluggish state at the end of the second quarter.
"Although business conditions have continued to improve, quelling recession fears, growth of business activity remains disappointingly lacklustre, indicative of second quarter GDP rising at only 0.1% quarterly pace."
However, he added there had been a "marked" cooling in inflationary pressures, especially in the service sector. Persistent inflation in the sector has long been a concern of the Bank of England’s rate-setting Monetary Policy Committee.
"As such, the picture of near-stalled growth, falling employment and lower inflation opens the door for the BoE to cut rates again at its next policy meeting in August," Williamson said.
Last week the MPC voted six-to-three to leave the cost of borrowing at hold at 4.25%, having already cut twice this year.
The composite PMI is compiled from responses to questionnaires sent to panels of around 650 manufacturers and 650 service providers.
Data were collected between 12 and 19 June. The final composite survey will be published next month.