UK business growth increased to a six-month high this month and boosted hopes that the economy will dodge a recession, according to an influential survey.

The closely followed S&P Global/CIPS flash UK purchasing managers’ index (PMI) reported a reading of 51.7 for December, up from 50.7 in November.

Any reading above 50 indicates the sector is growing. The flash figures are based on preliminary data.

The report said this meant Britain’s private sector continued its “modest recovery” after a downturn in the three months to October.

Economists involved in the survey said this could point towards the UK avoiding a technical recession – which means two consecutive quarters of decline.

Chris Williamson, chief business economist at S&P Global Market Intelligence, said: “The UK economy continues to dodge recession, with growth picking up some momentum at the end of the year to suggest that GDP stagnated over the fourth quarter as a whole.

“While employment, meanwhile, fell for a fourth month, the decline was only marginal and not indicative of any material rise in unemployment.”

Firms in the survey highlighted “tentative signs of a revival in customer demand”, particularly in the technology and financial services sector.

The pick-up in activity for the month was driven by stronger growth in the services sector.

The survey reported a reading of 52.7 for the services industry, representing a six-month high.

Meanwhile, the manufacturing sector saw activity drop, recording a 46.4 reading, reflecting the tenth consecutive month of decline.

John Glen, chief economist at CIPS (the Chartered Institute of Procurement & Supply), said: “UK manufacturing will be glad to see the back of 2023.

“Overstocked customers mean December is yet another month of decreasing production levels and reducing output volumes for the manufacturing sector.

“Despite an easing of supply chain pressures there was little relief from overseas markets, with export sales declining sharply.”

The latest survey also revealed that staffing numbers fell in December for the fourth month in a row amid pressure from economic uncertainty.