UK Services Sector Growth Slows Less than Initially Thought

The S&P Global UK Services PMI was revised slightly higher to 52.7 in April 2026 from a flash estimate of 52, up from March's 11-month low of 50.5. The data signaled a moderate expansion of the service sector, amid reported resilient global demand for technology services. However, new business intakes remained subdued overall amid headwinds from the Middle East conflict, with concerns over intensifying inflationary pressures, global supply shortages and elevated borrowing costs. Employment fell further, but the rate of job shedding was the weakest in six months. Service providers saw the fastest rise in cost burdens since November 2022, driven mainly by higher transport costs and wages. Several firms also introduced fuel surcharges, pushing service-sector output price inflation to a three-year high in April. Lastly, businesses continued to expect an upturn in business activity over the year ahead. Optimism edged up from March’s nine-month low but remained below the long-run average.

The S&P Global UK Services PMI rose to 52 in April 2026 from 50.5 in the prior month, surpassing market forecasts of 50, flash estimates showed. Business activity growth picked up from March’s 11-month low, with firms citing support from technology investment, marketing initiatives, and long-term business plans. However, new orders posted a marginal reduction, reflecting fragile demand conditions due to rising global uncertainty and higher inflationary pressures amid the ongoing Middle East conflict. Employment also continued to decline. Turning to prices, inflationary pressures increased sharply. Input cost inflation was the steepest since the survey began almost 30 years ago, largely due to higher fuel prices, alongside strong wage pressures. Output charges also rose significantly. Lastly, business sentiment deteriorated amid worries about geopolitical tensions weighing on costs, demand, and investment.

The S&P Global UK Services PMI was revised lower to 50.5 in March 2026 from a flash estimate of 51.2, down from February's 53.9. The sector saw its slowest expansion in the ongoing 11-month growth streak amid rising global economic uncertainty linked to the Middle East conflict. Output rose only slightly, while total new work fell for the first time since November 2025, recording the sharpest contraction in eight months. Export orders also fell sharply, marking the fastest decline since April 2025. Staffing numbers were further reduced, amid a lack of pressure on business capacity, alongside the need to mitigate rising payroll costs. Backlogs remained broadly unchanged despite widespread shipping delays and supply chain disruptions. Input cost inflation picked up to a 11-month high, driven by higher prices paid for fuel, transportation and raw materials. March saw continued positive expectations for business activity, although sentiment eased markedly from January’s 15-month high.