LONDON - British services companies reported an influx of new orders and the biggest rise in employment for over a year during July as optimism rose on the back of Prime Minister Keir Starmer's election victory, a survey showed on Monday.

The S&P Global UK Services Purchasing Managers Index rose in July to 52.5 from 52.1 in June and revised up slightly from a preliminary estimate of 52.4.

The survey added to signs of an upturn in business sentiment since the July 4 election which delivered a landslide victory for Starmer's Labour Party.

A gauge of new business rose to its highest level since May last year while the future activity index struck a five-month high - something that survey compiler S&P Global linked to the election outcome and expectations for lower interest rates.

The Bank of England cut interest rates last week for the first time since March 2020, to 5.0% from a 16-year high of 5.25%.

"Albeit only one month into the second half of 2024, the latest survey results bode well for a reasonable GDP growth print in Q3," said Joe Hayes, principal economist at S&P Global Market Intelligence.

He said price pressures, while close to their lowest since early 2021, remained historically high - a worry for the BoE, which signalled it will take a cautious approach about cutting interest rates further.

The composite PMI - which combines the services data with last week's manufacturing survey - rose in July to 52.8 from 52.3 in June and revised up from a flash estimate of 52.7.

The manufacturing PMI showed output in British factories expanded faster in July than in any other developed market surveyed by S&P Global.

(Reporting by Andy Bruce; Editing by Susan Fenton)