Business activity in the services sector increased for the 29th month in a row during October.

A survey of the sector - excluding retail and wholesale businesses - found that although it continued to show strong growth, the rate of growth continued to ease.

"The services sector continued to grow strongly in October. Confidence remains high and new business is brisk. Employment rose at an accelerated pace," said Eunan King, senior economist with NCB Stockbrokers, who carried out the survey.

The Business Activity Index for the month was 61.4, down slightly from 61.8 in September, but still well above the no-change level of 50.

According to NCB, the main drivers of increased activity were "efforts to satisfy improved volumes of new business".

The companies surveyed indicated robust expansion of incoming work, according to the survey.

In Britain the services sector grew at its fastest rate in three months, further weakening the case for a cut in UK interest rates.

The Chartered Institute of Purchasing and Supply (CIPS) said a surge in new business wins helped the sector recover from September's nine-month low.

CIPS's monthly Purchasing Managers' Index (PMI) report on the services sector showed business activity rose to 56.1 from 55 the previous month.

Philip Shaw, economist at Investec Securities, said the data made a cut in interest rates a little less likely.

"This underpins the prospect of rates remaining on hold next week," he said. "It has dispelled some fears the services sector could be slowing further." He still expected the next cut in rates to come early next year. - (Additional reporting, Reuters)