A closely watched gauge of the U.K. services sector unexpectedly surged in October, though evidence of mounting price pressures will complicate the Bank of England's mission to keep the economy on a stable course.

The Chartered Institute of Procurement & Supply/Markit said their services sector PMI rose to 54.5 from 52.6, defying expectations for the index to slip to 52.4. Any reading above 50 denotes economic expansion and the October figure marks the fastest growth since January.

The data will ease worries about the economic impact of a "hard" Brexit while further reducing the likelihood of additional Bank of England monetary stimuli. Policymakers, led by Bank of England Governor Mark Carney, pictured, meet today to set rates. Few, if any, observers expect any change after the bank's Aug. 4, quarter-point cut to the benchmark rate and its expansion of the bond buying program, and today's figures make further moves this year unlikely.

The services sector accounts for 79% of U.K. economic output, according to the government's statistics agency, and Thursday's figures may ease worries that the weakening pound will hamper consumption as it begins to push up prices and eat into shoppers' spending power. On Friday the GfK research institute cited the weaker pound as it reported a drop in its index of U.K. consumer confidence.

The CIPS/Markit report Thursday said the October services PMI indicated a "marked build up of inflationary pressures," though it noted that the overall result indicated a "continued recovery in growth following a contraction in July linked to the EU referendum."

"An encouraging picture of the economy gaining further growth momentum in October is marred by news that inflationary pressures are rising rapidly," said IHS Markit chief business economist Chris Williamson.

He noted that the survey suggests the U.K. economy will expand at a rate of 0.4% to 0.5% in the fourth quarter. The third-quarter growth rate came in at 0.5%, down from 0.7% in the second quarter but better than expected.

U.K. inflation jumped the most in almost two years in September, rising to 1% from 0.6%, above expectations for 0.9% price growth. The National Institute for Economic and Social Research warned yesterday that British inflation would soar to about 4% in the second half of next year.

The pound was recently up 0.39% against the dollar at $1.2352. The yield on the 10-year government bond was up 2 basis points at 1.18%.