The pound was firmer as a much stronger-than-expected survey of UK services sector activity dampened the prospect that the Bank of England will cut interest rates further in the coming months. The reading on the service-sector purchasing managers index surged to 57.9 from 55.8 in November, the highest level since April 2004 and well above the much more modest improvement to 56.0 that analysts had been expecting. At 10.01 am, the pound rose to 1.7550 against the dollar from 1.7525 just before the data were released, while the euro fell to 0.6893 stg from 0.6904 previously. "The strength in this survey will only make hawks on the Monetary Policy Committee more convinced that the hard data is understating the true strength of the UK economy," said Daragh Maher at CALYON. "As such, this release provides a nice counter-point to some of the softer data seen of late, and may provide some mild support to sterling while also tempering some of the market enthusiasm for a possible rate cut in February," he said.