UK private sector activity reached its strongest level in a year in August, led by growth in the services sector, according to preliminary S&P Global data. The flash UK composite purchasing managers’ index (PMI) rose to 53.0, up from 51.5 in July, signalling expansion across the economy.
Services, which cover finance, real estate, hospitality, and entertainment, saw the largest increase in new work. Firms reported stronger domestic demand and rising overseas sales following a subdued spring. Manufacturing output, by contrast, continued to contract, with the rate of new orders falling sharply.
Employment across the private sector has declined for 11 consecutive months, as companies manage rising operating costs. Input cost inflation reached its highest level since May, driven by increases in food, transport, international shipping, and national insurance contributions. Businesses, particularly in services, have passed on higher costs to customers through increased pricing.
Despite the growth, analysts note that the overall demand environment remains uneven, with ongoing geopolitical uncertainty affecting business confidence. The rebound in services is moderating previous weakness, but challenges in manufacturing and cost pressures continue to shape the broader UK economy.
