Growth in UK services sector hits eight-month high in October

(Sharecast News) - Growth in the UK services sector hit an eight-month high in October, according to a survey released on Wednesday. The S&P Global UK services PMI business activity index rose to 52.8 from 52.1 in September, reaching its highest level since February. A reading above 50.0 signals expansion, while a reading below indicates contraction.

The composite output index - which includes the services and manufacturing sectors - ticked up to 52.9 in October from 52.0 the month before, marking the highest reading since February.

Tim Moore, economics director at S&P Global Market Intelligence, said: "October data highlighted a combination of faster output growth and stronger price pressures across the UK service economy, mirroring the trends in the manufacturing sector. These signals underscore the near-certainty of a Bank of England rate hike in November and collectively raise the likelihood of further Bank of England policy tightening into 2027.

"Service providers signalled the fastest upturn in activity since February and another solid rebound in new orders, suggesting increasing economic resilience despite challenges from geopolitical tensions, elevated cost pressures and subdued consumer confidence. Greater workloads were attributed to an improved pipeline of sales opportunities, particularly those linked to AI investment spending.

"Business activity expectations for the year ahead also picked up in October, reaching an eight-month high amid signs of receding risk aversion and more positivity towards near-term customer demand. This contributed to a renewed expansion of employment numbers, but the pace of job creation was only marginal as firms noted efforts to control costs and prioritise efficiency gains where possible."