06-May-2026 14:17

The UK services sector showed a modest improvement in April 2026, with business activity picking up slightly, according to the latest PMI data. The S&P Global UK Services PMI Business Activity Index rose to 52.7 from 50.5 in March, signalling moderate expansion. However, growth remained slower compared to earlier in the year.

Demand conditions remained weak, with new business largely unchanged after a slight decline in March. Both domestic and export demand were affected by rising costs, global uncertainty, and disruptions linked to the Middle East conflict. Some firms also reported reduced export sales due to weaker demand from the region and business travel challenges.

Backlogs of work declined for the fastest pace since November 2025, indicating reduced pressure on capacity. Employment continued to fall, although at a slower pace, as firms adjusted staffing levels amid rising payroll costs.

Cost pressures increased sharply during April. Around 57% of firms reported higher input costs, driven mainly by rising fuel prices, wages, and raw material costs such as metals and plastics. This led to a strong increase in prices charged, with output inflation reaching its highest level since January 2023.

Despite these challenges, business confidence improved slightly from March, though it remained below the long-term average.

At the broader level, the UK Composite PMI rose to 52.6 in April from 50.3 in March, supported by gains in both manufacturing and services, indicating a moderate expansion in overall private sector activity.

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