UK services sector posts strongest growth in four months

The latest purchasing managers' index indicates that the UK services sector grew at its quickest pace in four months, marking the highest reading since April. While the figure fell short of economists' expectations, it still confirms ongoing expansion. Tim Moore of S&P Global Market Intelligence highlighted improving operating conditions but noted that growth projections remain modest amid lingering inflation concerns and geopolitical tensions.

Firms linked the uptick to a modest improvement in overall economic conditions and reduced client risk aversion, with both business and consumer demand driving higher order volumes. The survey also suggested a potential stabilisation in the labour market, as the rate of job losses slowed to the lowest level since October of the previous year, reflecting stronger order books and greater corporate optimism. However, respondents warned that rising costs and inflationary pressures continue to limit optimism, with Middle East conflicts influencing the inflation outlook and the Monetary Policy Committee likely to maintain a cautious stance.