FX.co ★ UK Services PMI Revised Lower

The S&P Global UK Services PMI increased to 54 in January, up from December's 51.4. Although slightly below initial estimates of 54.3, this figure marked the highest point since August 2025. New business saw robust growth, hitting a three-month high fueled by increased client spending, boosted digital marketing budgets, and investments in new technologies. However, sectors felt some strain due to subdued household demand and weak construction activity. Export orders experienced a slight uptick, with firms noting stronger demand from Europe, especially Ireland. Employment challenges persisted, with staffing levels declining for the fourth consecutive month, the longest stretch of job reductions in 16 years, as businesses emphasized cost control and automation. Input costs surged sharply, largely due to increased payroll, technology, and raw material expenses, leading to the most significant rise in prices charged since August 2025. Business optimism improved to its highest since October 2024, yet concerns over costs and long-term growth remained.