UK services activity growth accelerates in July – PMI

The UK services sector experienced a boost in July, with business activity growing at a faster pace than in the previous month, according to the latest S&P Global/CIPS UK Services PMI.

Key findings from the report include a sharp rise in new orders, both domestically and internationally, leading to increased hiring and a rebound in business confidence. However, persistent inflationary pressures continue to challenge the sector.

The survey data indicates a more optimistic outlook for the UK economy in the third quarter, as the service sector, which accounts for a significant portion of GDP, shows signs of resilience. While the overall economic picture remains complex, with inflation still elevated, the growth in services points to a potential upturn.

Despite the positive trends, experts warn that the ongoing battle against inflation remains a key challenge for both businesses and consumers. The Bank of England will be closely monitoring these figures as it weighs up future monetary policy decisions.

“With the general election period coming to an end at the start of July, survey data for last month showed the UK service sector enjoyed a modest rebound after a fairly subdued end to Q2. The Business Activity Index crept up only slightly, but the New Business Index jumped by over three points to its highest level in 14 months as firms reported an influx of new clients and contracts.” Joe Hayes, Principal Economist at S&P Global Market Intelligence, said.

“July’s accelerated expansion in sales activity crucially suggests business and consumer confidence has improved, and albeit only one month into the second half of 2024, the latest survey results bode well for a reasonable GDP growth print in Q3.”

Attribution: S&P Global UK Services PMI®