UK Services PMI Rises in August While Business Costs and Prices Climb
UK Services Sector Performance and Economic Outlook
LONDON, Sept 3 (Reuters) - Activity in Britain's dominant services sector grew for the second month in a row in August and confidence rose, according to a survey on Thursday that also showed more firms reporting rising prices, a potential concern for the Bank of England.
Services PMI Growth and Economic Resilience
The final reading of the S&P Global UK Services Purchasing Managers' Index (PMI) rose to 52.5 in August from 52.1 in July, its strongest growth since April. Thursday's reading was slightly below a provisional reading of 52.8 but added to signs of resilience in the economy despite the U.S.-Iran war.
Expert Commentary on Market Conditions
"August data highlighted improving operating conditions across the UK service economy. Business and consumer spending saw further gains after declining during the second quarter of 2026," said Tim Moore, economics director at S&P Global Market Intelligence.
Business Costs and Pricing Trends
Rising Prices and Input Costs
• S&P Global said more firms reported increasing the prices they charge as well as higher input prices after a slowdown in both measures in July
Bank of England's Inflation Concerns
• The BoE is keeping a close eye on firms' pricing plans as it tries to gauge how much of the surge in energy prices caused by the Middle East conflict will be passed on and push up inflation
Business Confidence and Labour Market
Optimism and New Work Index
• Optimism among services firms rose to the highest since February despite concerns about the Iran war and inflation
• The survey's index of new work eased slightly to 50.7 in August from July's 50.8
Employment Trends
Improved Sales Pipelines and Market Conditions
• Employment decreased at the slowest pace since October 2025, helped by improved sales pipelines and broader market conditions
Composite PMI and Broader Economic Indicators
• The composite PMI, which includes the smaller manufacturing sector, rose to 52.5 from 52.2, the highest since April.
(Reporting by Suban Abdulla; Editing by William Schomberg)
