Britain’s services sector is the engine of its economy. It perked up unexpectedly this month. This improvement is according to a survey conducted on Friday, 21 August ’26. It added to signs of resilience despite the conflict in the Middle East.
The S&P Global Flash UK Services Purchasing Managers’ Index (SPMI) rose to a 6-month high of 52.8 in August. This was an increase from 52.1 in July, the previous month. This figure exceeded all the forecasts in a Reuters poll, which had predicted a decline to 51.8.
Enterprises cited improving domestic conditions. That’s a picture backed by news earlier in the day that consumer confidence rose this month to its highest level in 2 years, in August 2024. This was shortly after the Labour government was elected under Prime Minister Keir Starmer.
Friday’s surveys added to signs of surprise strength in the economy. It’s a bonus for Starmer’s successor, Andy Burnham, besides finance minister John Healey. They hoped to defy forecasts for a slowdown after robust economic growth during the first half of this year.
Data company S&P Global said that its figures were consistent. The report was accompanied by economic growth of around 0.3% in the 3rd quarter. The forecast may approach the outturn in the second quarter.
Chief business economist at S&P Global, Chris Williamson, said that the expansion’s being helped by sunny weather & tech investment. Williamson added that as expected, the UK has witnessed some softening of growth in the manufacturing sector as precautionary stock building cools.
Official data last week also highlighted strong tech investment as the AI boom increasingly makes itself felt in the UK’s economic performance.
The flash PMI’s gauges of input & output prices partially rebounded this month after failing in July ’26. It reflects a rise in global energy prices over the last few weeks. This situation is due to no signs of the Iran war nearing an end.
Employment in the services sector continued to decline, although at the slowest pace since last October.
