UK services firms suffer surge in costs, raise prices, PMI shows

UK Services Firms Report Rising Costs and Higher Prices Amid PMI Decline

Rising Costs and Economic Pressures in the UK Services Sector

Overview of September Survey Results

LONDON, Oct 5 (Reuters) - British services firms reported stronger cost pressures last month as fuel prices surged due to the Middle East conflict and a measure of prices charged by companies hit its highest since May, according to a survey published on Monday.

The headline gauge in the S&P Global Purchasing Managers' Index for the services sector came in at 52.1 in September, down from 52.5 in August, its joint-weakest ​growth since June. 

Impact of Fuel Prices and Input Cost Inflation

"Surging fuel prices due to the Middle East conflict continued to drive up input cost inflation in September," said Tim Moore, economics director at S&P Global Market Intelligence. "This led to the sharpest increase in prices charged by service sector companies since May and therefore signalled a clear reversal of the slowdown seen in the middle of 2026."

Key Survey Highlights

• S&P's measure of input cost inflation for British services companies increased in September to its highest since June due to wages as well as higher fuel prices
• More than a third of firms reported an increase in their average cost burdens
• A measure of prices charged by companies was the highest since May, potentially adding to worries at the Bank of England about a pickup in inflation
• Employment fell for the 24th month in a row, the longest period of decline since records started in 1997
• Business sentiment for the year ahead edged down from August's seven-month high due to weak demand and cost pressures
• The composite PMI, ​which includes the manufacturing industry, eased to 52.0 from 52.5, the lowest since June but still in growth territory above the 50.0 level

Outlook and Industry Sentiment

(Reporting by Suban Abdulla; editing by William Schomberg and Toby Chopra)