Britain's service sector continued to boom last month with new business and employment both rising.

The Chartered Institute of Purchasing and Supply's (CIPS) survey of the UK service sector recorded "further strong expansion" in July.

The strong demand pushed the CIPS service sector business activity index up to 58 points.

This was a jump from the 57.2 recorded in June.

A range of questions were used to create the CIPS index numbers.

Any index figure above 50 indicates growth, while a number below 50 points to contraction.

Companies reported new business, activity and employment had all risen at "accelerating rates" during the month.

Roy Ayliffe, director of professional practice at the CIPS, said: "The service sector is now experiencing a sustained period of expansion.

"Purchasing managers are controlling costs to protect their bottom line in the face of rising input prices and continued pressure on margins."

The CIPS report is based on data compiled from monthly replies to questionnaires sent to purchasing and business executives in 500 private sector companies.