UK PMI data for March point to a sharp loss of growth momentum as the Middle East conflict begins to weigh on activity. PMI Manufacturing edged down from 51.7 to 51.4, while PMI Services dropped more notably from 53.9 to 51.2, a six-month low. As a result, PMI Composite declined from 53.7 to 51.0, also marking its weakest level in six months.
The slowdown reflects weakening demand across both sectors. Firms reported lost business linked directly to the conflict, citing heightened risk aversion among customers, disruptions to travel and supply chains, and the impact of higher interest rates. According to S&P Global’s Chris Williamson, output growth has slowed “to a crawl”.
At the same time, inflation pressures are accelerating sharply. Rising energy prices and supply chain disruptions have driven a surge in input costs, with manufacturing cost inflation reaching its highest level since the aftermath of Sterling’s depreciation in 1992.
