UK Service Sector Growth Weakens Amid Middle East War Concerns

(RTTNews) - The UK service sector grew at the slowest pace in almost a year in March as businesses and consumers scaled back spending due to the concerns about the war in the Middle East, survey results from S&P Global showed Tuesday.

The services Purchasing Managers' Index fell to 50.5 in March from 53.9 in February. The score was also below the earlier flash estimate of 51.2. The service sector expanded at the weakest pace since April 2025.

Regional instabilities and rising global uncertainty led to a renewed fall in total new work received by service providers. New business from abroad dropped at the fastest rate since April 2025.

Backlogs of work remained broadly unchanged in March. As a result, firms reduced headcounts in March. However, the latest fall in employment was the slowest since October 2025.

Input price inflation rose to its highest since April 2025. Likewise, output charges rose the most in eleven months.

Finally, business expectations dropped further from January's 15-month high as respondents cited concerns about the duration of war in Iran.

The composite output index registered 50.3 in March compared to 53.7 in February and the flash score of 51.0. Data signaled a loss of growth momentum in the service economy and a renewed downturn in manufacturing production.