UK services activity at four-month high in August, PMI shows
LONDON, Sept 4 (Reuters) -Britain's services activity grew last month at the fastest pace since April and price pressures eased, according to a survey that pointed to a more benign inflation outlook and a settling of the economy after July's elections.
The S&P Global UK Services Purchasing Managers Index rose in August to 53.7 from 52.5 in July, above a preliminary estimate of 53.3.
The survey added to signs of an upturn for business since the July 4 election which delivered a landslide victory for Prime Minister Keir Starmer's Labour Party.
Cost pressures for services companies and their selling prices increased at the weakest rate since early 2021, something that will be welcomed by the Bank of England ahead of its Sept. 19 announcement on interest rates.
The central bank cut borrowing costs last month for the first time since March 2020, to 5.0% from a 16-year high of 5.25%. Investors expect another cut before the end of the year.
"August data highlighted a recovery in UK service sector performance as improving economic conditions and domestic political stability helped to bolster customer demand," said Tim Moore, economics director at S&P Global.
However, the survey showed optimism for the year ahead cooled slightly and growth in employment slowed.
"Hopes of interest rate cuts and steady improvements in broader economic conditions helped to support confidence, but some firms cited concerns about policy uncertainty in the run-up to the autumn budget," Moore said.
Finance minister Rachel Reeves has warned that taxes will have to rise in her Oct. 30 budget to help ease the pressure on the public finances.
The composite PMI - which combines the services data with Monday's manufacturing survey - rose in August to 53.8 from 52.8 in July, revised up from a flash estimate of 53.4.
The manufacturing PMI showed output in British factories expanded faster in August than in any other developed market surveyed by S&P Global.
Reporting by Andy Bruce
Editing by Christina Fincher
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
