The UK service sector continued to expand steadily in February, with final PMI Services reading coming in at 53.9, only slightly below January’s 54.0. PMI Composite index was unchanged at 53.7, maintaining the 17-month high reached at the start of the year.
According to Tim Moore of S&P Global Market Intelligence, service providers reported rising new business inflows and stronger sales pipelines, driven largely by domestic demand. Businesses cited improved spending from both companies and consumers within the UK, though export orders remained relatively subdued and growth in that segment eased to a three-month low.
Despite the improving activity backdrop, employment declined across the sector. Companies continued to cut jobs as part of efforts to boost productivity and offset rising costs. Firms widely cited higher payroll expenses as a key driver of input cost inflation, alongside increases in food and technology costs. These pressures led to another robust rise in prices charged by service providers, with inflation in selling prices remaining close to January’s five-month high.
