UK services PMI edges higher in September final reading

The UK's final services PMI for September came in at 52.1, slightly higher than the preliminary estimate of 51.7 but down from the prior reading of 52.5. The composite PMI also declined to 52.0 from the preliminary 51.7 and the prior 52.5.

Service sector output rose for the third consecutive month, though momentum slowed compared to August. Input cost inflation hit its highest level since June due to surging fuel prices. Business optimism eased from August's six-month high.

Tim Moore, Economics Director at S&P Global Market Intelligence, noted that output growth remained moderate but lost some momentum. New order intakes increased only slightly, with geopolitical tensions, squeezed consumer budgets, and higher borrowing costs cited as sales headwinds. Technology services demand remained resilient.

Employment in the service sector has been cut for two years, but the latest decline was the slowest since October 2025 due to greater-than-expected business requirements. Fuel prices driven by Middle East conflict led to the sharpest increase in prices charged by service sector companies since May.

The market reaction to the data was muted, as final PMIs typically trigger smaller moves than preliminary ones. The Bank of England is still expected to hike rates at the upcoming meeting, with an 85% probability.