FX.co ★ UK Services Growth Surprises on the Upside

The S&P Global Flash UK Services PMI increased to 54.3 in January 2026, up from 51.4 in December, surpassing predictions of 51.7, according to preliminary estimates. This marks the ninth consecutive month of growth in the sector, reaching a 21-month peak. Survey participants credited post-Budget clarity for spurring new projects and enhancing client investment, despite the UK's sluggish economic outlook. Total new orders increased for the third time in four months, with the most rapid growth since last October, although still below the long-term average. Additionally, exports hit an 18-month high, buoyed by the first rise in foreign orders for manufacturing in four years. Nevertheless, employment declined more rapidly due to rising payroll costs and challenging economic conditions. Increased cost pressures maintained inflation at December's seven-month peak, leading to a significant and accelerated rise in output charges. Business expectations continued to improve in January, with optimism for the coming year reaching its highest level since September 2024.