The PMI for the services industry alone, which accounts for the bulk of Britain's private-sector economy, fell to 39.5 in January from 49.4 in December, its lowest since May and marking a third month of contraction.
IHS Markit said the Composite PMI Index was 58.7 in January, up from 55.3 in December, to signal the quickest rise in private sector business activity in the USA since March 2015.
Activity in the US services sector gained momentum in January amid a strong rise in new business, data from IHS Markit showed Wednesday. The fiscal deficit has been pegged at 9.5 per cent of GDP for FY21 and 6.8 per cent for FY22.
Businesses think that the situation is likely to get better by this time next year, with around 60 per cent predicting a rise in activity over the next 12 months.
Researchers found that 41 per cent of businesses that responded to the PMI survey indicated that their output had declined in January, with only 15 per cent registering an expansion. Marketing efforts, the reopening of some establishments and strengthening demand supported the increase in sales.
Business activity across the German service sector contracted for a fourth month running in January as a stricter lockdown hit businesses and put Europe's largest economy on track for a first-quarter contraction.
On the inflation front, input costs increased for the seventh straight month at the start of 2021, with monitored companies reporting higher prices for fuel and a wide range of materials.
Going forward, service providers were confident of a rise in output in the coming 12 months on the back of beliefs that the roll-out of Covid-19 vaccines would underpin demand growth and improvements in the wider economy.
Commenting on the data, "a strong start to the year for manufacturing was accompanied by a marked upturn in the service sector, driving business activity growth to the fastest rate for nearly six years during January, said Chris Williamson, Chief Business Economist at IHS Markit".
But amid hopes the vaccines being rolled out would allow for some return to normality, overall optimism about the year ahead remained resilient.