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UK services activity expanded in October at a stronger pace than initially estimated as demand strengthened, according to a closely watched survey, easing concerns about the upcoming Budget’s effect on the economy.
The S&P Global UK Services PMI Business Activity index rose to 52.3 in October, up from an earlier flash reading of 51.1 and well above the five-month low of 50.8 recorded in September. It was also higher than the 50 mark, which divides contraction from expansion.
“The latest survey offered some positive signals for the UK service economy,” said Tim Moore, economics director at S&P Global Market Intelligence.
“A number of firms noted resilient customer demand, especially in domestic markets, despite elevated business uncertainty and delayed decision-making on major spending ahead of the Budget,” he added.
Output growth expectations rebounded to a 12-month high in October, with lower borrowing costs and planned investments in new technologies cited as factors supporting positive sentiment.
Stronger order books and successful new product launches had helped to boost activity in October, according to the survey, with the rate of new business expansion being the second-fastest since October 2024, exceeded only by that seen in August.
The PMI index suggested that services, the economy’s dominant sector, ended the third quarter with “renewed momentum,” said Martin Beck, chief economist at WPI Strategy. This implies “that fears of Budget speculation dampening activity may, for now, have more bark than bite,” he added.
