UK Business Growth Grinds to Near-Halt in March as Middle East War Weighs

The S&P Global UK Composite PMI was revised down sharply to 50.3 in March 2026, below both the preliminary estimate of 51 and February’s 53.7, marking the slowest business activity growth in six months. The reading points to only a marginal expansion, as the Middle East war saps momentum across the economy. Service sector growth stalled, while manufacturing output contracted again, reversing recent gains. On the cost front, input price inflation surged to its highest level since February 2023, squeezing margins. Meanwhile, business confidence plunged to its lowest since June 2025, reflecting deepening concerns over the economic outlook.

The S&P Global UK Composite PMI fell to 51.0 in March 2026, down from 53.7 in February and below expectations of 52.9, according to preliminary data. This marks the slowest output growth since September 2025, as both services and manufacturing activity weakened. New business inflows declined for the first time in four months, with firms attributing the drop to falling confidence amid the Middle East conflict, rising inflation, and expectations of higher borrowing costs. Employment declined at a faster pace, and business confidence plunged to a nine-month low. On the price front, input cost inflation hit its highest since February 2023, with manufacturers reporting the steepest cost increases since October 2022 and the sharpest month-on-month acceleration since October 1992, just after the UK’s Black Wednesday. Output charges also surged, adding to cost pressures.

The S&P Global UK Composite PMI stood at 53.7 in February 2026, unchanged from January’s 17-month high but slightly below the preliminary estimate of 53.9. The reading signaled a solid expansion in private sector activity, extending the current growth streak to ten months. Manufacturing output rose at its fastest pace since September 2024, partly offsetting a marginal slowdown in services growth. However, employment fell again, marking a 17th consecutive monthly decline. Inflationary pressures eased somewhat, with both input costs and output charges rising more slowly than at the start of the year.