British companies hired staff at the fastest rate in 16 years in February, as growth in orders and broader economic recovery fuelled confidence.
The Markit employment index, combining the latest survey data from the services, manufacturing and construction sectors, rose to 56 in February from 55.7 in January, where anything above 50 indicates expansion. It was the highest since the combined series began in January 1998, achieved after all three sectors of the economy continued to recover last month with a rise in new orders and output.
Chris Williamson, chief economist at Markit, said the record rise in jobs was the "most encouraging of all".
UK employment has been rising over recent months, and rose by 193,000 between October and December to 30.15 million people according to the latest official data.
Analysis by the Office for National Statistics (ONS) showed that older workers, and especially women over the age of 50, have returned to the workforce in greater numbers than at any time in the past 40 years, taking the participation rate back to levels last seen in the early 1990s. It is likely that falling household incomes and the prospect of an impoverished old age have driven many of the over 50s to reconsider early retirement or stopping work to look after grandchildren.
The return of older workers to the jobs market and the decision of more young people to stay in education has also meant that large parts of the private and public sectors are working nearer their full capacity than a year ago, the ONS found.
But running counter to this trend is the increased use of part-time workers in the services industry, with many likely to be on flexible or zero-hours contracts, which has kept productivity lower than in previous recoveries.
Meanwhile Markit surveys painted a positive picture of the private sector in both the UK and the eurozone, suggesting broad economic recovery continued in the early months of 2014.
Businesses in the single currency bloc grew at the fastest pace for more than two and a half years in February, led by Germany. Markit's eurozone composite purchasing managers' index (PMI), which monitors activity across thousands of businesses, rose to 53.3 from 52.9 in January. Activity in Germany's private sector rose to a 33-month high, but the news was less positive for France where business reported contraction.
The gulf between growth in Germany and decline in France was the "most striking in the history of the PMI surveys with the exception of early-2013", according to Markit.
In the UK, the services sector showed strong growth in February, despite extreme weather causing severe flooding in several parts of the country.
Activity in the sector, which accounts for more than three-quarters of the UK economy, rose for a 14th straight month, boosting confidence among services companies which rose to the highest level in almost four and a half years. While some businesses reported disruption as a result of the floods, others said the mild weather had brought customers in.
The headline services PMI index edged slightly lower to 58.2 in February from 58.3 in January, but economists said there was no cause for concern about the sector's recovery.
Williamson said: "The services economy notched up yet another month of robust growth in February, a performance that is all the more remarkable given the weather-related disruptions that have hit many businesses.
"Sustained strong growth in the services sector means it remains the most important driver of the economic recovery."
Williamson added that the combined data suggested the economy overall was on course for growth of around 0.7% in the first quarter of 2014, in line with growth in the fourth quarter of 2013.
Confidence in the services sector was at its highest since September 2009 in February, pushing the business expectations measure to 74.7 from 74.3 a month earlier.
Economists said there was every indication the UK economy was on course for a strong year in 2014.
Christian Schulz, senior economist at Berenberg, said: "The UK is heading for another strong quarter of economic growth at the start of 2014, with a strong services PMI highlighting that the risks to the consensus GDP growth forecast of 2.7% for 2014 are skewed to the upside. We expect an expansion by 3%.
