The S&P Global UK Composite PMI held steady at 52.5 in August, unchanged from July and comfortably above market expectations of a decline to 51.6, according to a flash estimate. Growth was supported by renewed momentum in the services sector (52.8 vs. 52.1 in July), which more than offset a slowdown in manufacturing (51.2 vs. 52.9). Aggregate new orders rose to their highest level since February, before the outbreak of conflict in the Middle East, underpinned by the resilience of services demand.
However, employment continued to weaken, with staffing levels falling for nearly two consecutive years on a monthly basis, as firms again pointed to sharply rising labour costs following changes to National Insurance contributions. Input costs across the private sector accelerated, driven by higher fuel prices and wages, which in turn led to a renewed pickup in output charge inflation. Looking ahead, overall business sentiment strengthened for a third consecutive month, supported by improved margins since energy prices peaked in June.
