Final PMI confirms UK services return to growth in July as demand up
(Alliance News) -The UK services sector returned to growth in July as business activity and new orders increased for the first time in several months, while cost pressures eased, according to purchasing managers' index survey results from S&P Global on Wednesday.
The services PMI business activity index rose to 52.1 points in July from 48.8 in June, moving back above the 50-point threshold that separates growth from contraction.
The reading marked the first expansion in business activity for three months and came above the flash estimate of 51.8 points published in late June.
The survey showed new services business increased in the UK for the first time since February, supported by stronger demand for technology services and tentative signs of a recovery in consumer spending. Export orders continued to decline, however, albeit at the slowest pace in five months, with service providers citing disruption linked to the Middle East conflict and strong competition.
Employment fell for a 22nd consecutive month, although the pace of job losses was the weakest since October 2025, as lower backlogs of work pointed to spare capacity across the sector.
Input cost inflation slowed for a third straight month to its weakest level since February, helped by lower fuel costs, while output price inflation eased to a five-month low.
S&P Global Market Intelligence Economics Director Tim Moore said: "Inflationary pressures clearly remain elevated, as the ongoing energy shock and supply squeeze from the war in the Middle East continues to add to existing business cost pressures from earlier government policies. These higher costs led to a further fall in employment, which has declined continuously since the autumn 2024 budget."
The UK composite PMI output index, which combines manufacturing and services, rose to 52.2 points in July from 49.3 in June, also above the flash reading of 52.1 points.
On Monday, S&P Global data showed the UK manufacturing PMI slipped to 51.9 points in July from 52.5 in June.
The composite PMI is compiled by S&P Global from responses to questionnaires sent to panels of around 650 manufacturers and 650 service providers in the UK. Survey responses are collected in the second half of each month.
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