January data also signalled a sustained improvement in new order intakes across the private sector economy, which contributed to the most upbeat level of business optimism for 16 months. However, strong input cost inflation persisted, which resulted in the greatest increase in average prices charged by private sector firms since August 2025.

At 53.9 in January, up from 51.4 in December, the headline seasonally adjusted S&P Global Flash UK PMI Composite Output Index posted above the neutral 50.0 threshold for the ninth consecutive month. The latest reading was the highest since April 2024 and signalled a robust rate of expansion.

Service providers recorded a particularly strong upturn in business activity, with the rate of growth the fastest for 21 months. A number of survey respondents suggested that post-Budget clarity had led to the release of new projects and helped to boost investment spending among clients, despite subdued projections for the broader UK economic outlook.

Manufacturing production meanwhile increased modestly. Higher output volumes have been recorded in each of the past four months, and the latest rise was the fastest since October 2025. Some goods producers noted improved export sales, while others signalled a boost from customer restocking.

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