In a report, market research group Markit said the seasonally adjusted Markit/CIPS Services Purchasing Managers Index rose to 60.5 in August from a reading of 60.2 in July.
Analysts had expected the index to ease down to 59.0 last month.
On the index, a level above 50.0 indicates expansion in the industry, below 50.0 indicates contraction.
The report showed that growth in new work was the best seen since May 1997.
Commenting on the report, Paul Smith, Senior Economist at survey compilers Markit said, ““With sister surveys for construction and manufacturing also signaling the continuation of substantial growth, the U.K. is well on course to register a strengthening of GDP growth over Q3 as a whole following the 0.7% increase in Q2.”
Following the release of that data, the pound added to gains against the U.S. dollar, with GBP/USD climbing 0.15% to trade at 1.5585.
Meanwhile, European stock markets remained lower. London’s FTSE 100 dipped 0.45%, the EURO STOXX 50 shed 0.6%, France's CAC 40 retreated 0.65%, while Germany's DAX inched down 0.3%.