UK Services Activity Expands At Slower Pace

(RTTNews) - The UK service sector activity continued to expand in September amid rising domestic demand, though the pace of growth eased since August, final survey data from S&P Global showed on Thursday.

The S&P Global Services Purchasing Managers' Index dropped to 52.4 in September from 53.7 in the previous month. The flash score was 52.8. However, a reading above 50 indicates expansion in the sector.

New orders grew close to the 14-month peak seen in July, underpinned by lower borrowing costs and domestic economic stability.

Nonetheless, the survey revealed that policy uncertainty ahead of the Autumn Budget on 30th October 2024 had encouraged a wait-and-see approach to major investment decisions among clients.

A subdued overseas demand was evident in the British service sector as export orders continued to rise at a slower pace than total new work amid challenging market conditions and the adverse impact of EU trade frictions.

Consequently, firms reduced their hiring activity, with the rate of job creation easing considerably since August to its lowest for three months.

On the price front, cost pressures intensified due to rising salary payments. Apart from that, higher shipping costs and greater expenditure on technology services also drove elevated input price inflation. Despite this, selling price inflation eased to the lowest since February 2021 as pricing power was limited by competitive pressures.

Looking ahead, business activity expectations over the next year remained upbeat in September on the back of softening inflationary pressures and stable domestic economic conditions.

The composite output index declined to 52.6 in September from 53.8 in August, indicating the slowest upturn in private sector activity in three months.