Business activity in the services sector improved over the three months to May and optimism also grew, according to the CBI’s quarterly Service Sector Survey.

Although the business and professional services sector, which includes accountancy, legal and marketing firms, saw activity staying broadly flat, consumer services, such as hotels, bars, restaurants and the travel and leisure industries, saw business volumes rise at their fastest pace since August 2007.

And while overall profitability fell, despite an increase for consumer businesses for the first time since Novermber 2007, optimism regarding the business situation rose at its fastest rate since February 2010, as expectations for the next quarter are somewhat brighter.

The survey of 170 companies revealed expectations of a firm quarter ahead, with business and professional services expecting solid growth in both the value and volume of business. Consumer services firms predict that growth in business will be sustained and profits in both sectors are expected to rise strongly.

Stephen Gifford, CBI director of economics, said: “There appears to be a sense of growing confidence in the service sector. We’ve seen some turnaround in activity this quarter, and a more positive outlook for the next.

“While activity has been pretty flat for business and professional firms, the outlook is much stronger.

“What’s promising is that consumer services have seen growth in activity, and expect this to continue pointing to a greater willingness from people to go out and spend.

“But there is concern around getting access to finance, so it’s vital that growing firms look at the full range of funding options out there on the market.

“Conditions remain tricky, with consumers still grappling with a squeeze on real incomes, and business confidence vulnerable to any adverse developments in the global economy.”