Final September UK services PMI rises to 52.1 from preliminary 51.7

• The prior services PMI reading was 52.5.
• The final composite PMI stood at 52.0, compared to a preliminary 51.7.
• The prior composite PMI was 52.5.

Key takeaways from the report:

• Service sector output increased for the third consecutive month.
• Input cost inflation hit its highest level since June, driven by soaring fuel prices.
• Business confidence eased from the six-month high recorded in August.

Commentary from S&P Global:

Tim Moore, Economics Director at S&P Global Market Intelligence, said:

"Moderate output growth was maintained across the UK service economy in September, albeit with a loss of momentum in comparison to August. Moreover, subdued demand conditions and rising inflationary pressures contributed to weaker business activity expectations for the year ahead.

New order intakes increased only slightly in September and at the slowest pace for three months. Geopolitical tensions, squeezed consumer budgets and higher borrowing costs were cited as sales headwinds. Resilient demand for technology services remained the main bright spot, while some firms noted receding risk aversion among clients.

September data marked two years of continuous cutbacks to employment numbers in the service sector amid ongoing efforts to reduce overheads. However, greater-than-expected business requirements seem to have helped to stem the jobs downturn in recent months, with the latest fall the slowest since October 2025.

Surging fuel prices due to the Middle East conflict continued to drive up input cost inflation in September. This led to the sharpest increase in prices charged by service sector companies since May and therefore signalled a clear reversal of the slowdown seen in the middle of 2026."

The data elicited a subdued market response. Markets tend to react more to new information that alters prevailing expectations. This is why preliminary PMI readings usually cause larger market movements, while final readings are often overlooked. Regarding market pricing, expectations for the Bank of England remain unchanged. The market continues to price in an 85% probability of a rate hike at the next meeting.