UK Services Sector Growth Beats Forecasts

The S&P Global UK Services PMI rose to 53.1 in October 2026 from 52.1 in September, above market forecasts of 51.8, flash estimates showed. The latest data showed that growth in overall service sector accelerated to its highest level in eight months, led by a marked improvement in new orders. A number of firms cited a boost to sales from AI investment spending and rising demand for technology services. Employment growth resumed in October, supported by an influx of new projects and a focus on long-term business expansion, although many firms continued to adopt cautious hiring strategies. Meanwhile, price pressures remained elevated. Lastly, business sentiment improved, with service providers highlighting planned investment in new products and marketing initiatives, alongside a gradual recovery in expectations for broader market conditions.

The S&P Global UK Services PMI was revised slightly higher to 52.1 in September 2026 from a flash estimate of 51.7, slightly below August's 52.5. The reading signalled moderate growth in the services sector, with new orders rising only slightly and posting their slowest growth in three months. Geopolitical tensions, tighter consumer budgets and higher borrowing costs weighed on demand, although resilient technology services demand remained a bright spot and client risk aversion eased. Employment continued to fall, marking two years of job cuts, although the decline eased to its slowest pace since October 2025. Meanwhile, input-cost inflation accelerated to its fastest pace since June, reflecting higher fuel prices and payroll costs. This led to the sharpest increase in prices charged since May. Looking ahead, firms remained optimistic, but confidence eased from August’s six-month high amid economic uncertainty, Middle East worries and weak real estate and construction demand.

The S&P Global UK Services PMI fell to 51.7 in September 2026 from 52.5 in August, below market forecasts of 52, flash estimates showed. The latest reading pointed to a slower expansion of overall service sector output, with growth hitting a three-month low. Service providers cited weak domestic conditions and geopolitical uncertainty as constraints on activity growth, although demand for technology services provided some support. New business volumes posted a renewed decline amid budget constraints, while export sales fell further. Employment numbers also continued to decrease in September, amid higher operating costs, efficiency gains, and a lack of pressure on business capacity. On the price front, input cost pressures strengthened, mainly on account of fuel prices. Business confidence among service providers eased slightly in September amid rising geopolitical uncertainty, although some firms remained optimistic about the longer-term outlook and a rebound in sales.