The recovery of the UK’s service sector gained momentum in August, as data from S&P Global on Wednesday showed that the post-election upturn in business activity was sustained from July.

The seasonally adjusted services PMI business activity index registered 53.7 in August, up from 52.5 in July, and higher than an initial flash estimate of 53.3.

The reading remained above the neutral 50.0 threshold for the tenth consecutive month.

According to survey respondents, the rise in business activity was in part down to an ‘improving economic backdrop’, and an associated rise in ‘willingness to spend’.

‘Service providers responded to the upturn in business conditions by hiring additional staff in August. Job creation remained faster than seen on average in the first half of 2024, despite headwinds from scarce candidate availability and elevated wage pressures,’ said Tim Moore, economics director at S&P Global Market Intelligence.

‘The modest post-election bounce in business activity expectations faded, however, in August. Hopes of interest rate cuts and steady improvements in broader economic conditions helped to support confidence, but some firms cited concerns about policy uncertainty in the run-up to the Autumn Budget.’

The seasonally adjusted UK PMI composite output index rose to 53.8 in August, from 52.8 in July. This was higher than the initial flash estimate of 53.4.

Higher levels of output were seen in both the manufacturing and service sectors, with data also revealing ‘a sustained upturn in private sector employment’.

The services PMI is compiled by S&P Global from responses to questionnaires sent to a panel of around 650 service sector companies in the UK. The responses were collected in the second half of the month.

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