UK services growth firms in August but price pressures build
UK services PMI rose to 52.5 in August, signalling steady growth, while more firms reported higher prices — a key concern for the Bank of England.
Britain's services sector extended its recovery in August, posting a second consecutive month of expansion, according to the final S&P Global UK Services Purchasing Managers' Index (PMI). The headline index rose to 52.5 from 52.1 in July, marking the strongest growth since April, though slightly below the earlier flash estimate of 52.8.
The survey pointed to improving operating conditions, with both business and consumer spending recovering after a weak second quarter. Tim Moore, economics director at S&P Global Market Intelligence, noted that demand had picked up following the earlier decline.
However, the data also flagged a fresh build-up in cost pressures. More firms reported higher input costs and increased the prices they charge, reversing a slowdown seen in July. This trend will be closely watched by the Bank of England as it assesses how much of the energy price surge linked to the Middle East conflict will feed through to broader inflation.
Business optimism among service providers rose to its highest level since February, despite lingering concerns over the Iran war and inflation. New work inflows eased only marginally to 50.7 from 50.8, while employment fell at the slowest pace since October 2025, helped by improved sales pipelines.
The composite PMI, which also covers manufacturing, rose to 52.5 from 52.2 — its highest reading since April — reinforcing signs of resilience across the wider economy.