- Before 53.4
- Composite PMI 52.9 versus preliminary 52.5
- Before 52.1
The overall figure is the highest for eight months, as business activity in the UK picks up further pace to start the new year. Adding to the good news is the fact that inflationary pressures appear to be easing, which will help the BoE if the trend continues. S&P Global notes that:
“The recovery in performance of the UK services sector gathered pace in early 2024, with output growth reaching its highest level in eight months amid stronger business spending and consumption. New orders also rebounded this winter as diminishing recession risks and easing financial conditions led to a greater willingness to spend among customers.
“Inflationary pressures eased in January, despite stronger demand conditions. The latest data indicated that total input costs increased at one of the slowest rates seen over the past three years.
“Service providers reporting an increase in operating expenses overwhelmingly linked this to high wage pressures. This resulted in another month of sharp rises in average prices charged, although the inflation rate fell at its lowest level in four months.
“The combination of falling inflation and improving order books has strongly boosted expectations for business activity across the services economy. The degree of optimism about the outlook growth rate for the coming year was the highest since April 2023. A further improvement in business confidence in January provides a signal that high levels of geopolitical uncertainty have not yet placed a great constraint on projections of growth in the services sector for 2024.”