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Economic Buzz: UK service sector sees some recovery in January
04-Feb-2026 15:49
The headline seasonally adjusted S&P Global UK Services PMI Business Activity Index registered 54.0 in January, up from 51.4 in December and above the 50.0 no-change mark for the ninth consecutive month. Moreover, the latest reading signalled the fastest pace of expansion since August 2025.

January data highlighted a robust increase in business activity across the service economy, which contrasted with only marginal growth during the final quarter of 2025.

Higher levels of business activity were linked to greater confidence among clients, new project starts and a postBudget improvement in investment sentiment. However, there were also many reports that geopolitical uncertainties and fragile consumer demand had weighed on growth in January.

January data signalled stronger growth momentum across the UK private sector economy. At 53.7, up from 51.4 in December, the seasonally adjusted S&P Global UK PMI Composite Output Index was the highest for since August 2024 and pointed to a solid upturn in business activity.

This was supported by sharper rises in both manufacturing production and service sector activity, with the latter recording the faster pace of expansion. Adding to signs of a turnaround in demand conditions, latest data pointed to the strongest rise in total new work and the highest business optimism since September 2024.

However, private sector job losses accelerated since December. Prices charged inflation intensified at the start of 2026, with the latest reading the highest since August 2025. This was despite a slight slowdown in overall input cost inflation.

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