The S&P Global UK Composite PMI slipped to 51.7 in September 2026 from 52.5 in August, coming in just below market expectations of 52, according to a flash estimate. Even so, the reading signaled a third consecutive month of expansion in UK private sector activity, following back-to-back contractions in May triggered by the surge in prices after the outbreak of war in Iran.
The loss of momentum was broad-based, with activity softening in both services (51.7 vs. 52.5 in August) and manufacturing (51.4 vs. 52.1). Service providers reported that geopolitical uncertainty in the Middle East continued to weigh on demand, dampening overall new orders in the UK and partly offsetting support from technology-related services. On the manufacturing side, a number of firms saw sales underpinned by investment in artificial intelligence and by stronger defense spending.
Employment declined for a second consecutive year, as many firms again pointed to the burden of National Insurance contributions. At the same time, input cost inflation rose to a three-month high, driven by broad-based increases across subsectors, led primarily by higher labor and fuel costs. Despite these headwinds, overall business optimism remained unchanged.
