UK service sector picks up in June - PMI
By Abigail Townsend
Date: Thursday 03 Jul 2025
(Sharecast News) - The UK service sector rebounded modestly in June, a closely-watched survey showed on Thursday, boosted by a pick-up in consumer and business sentiment.
The final S&P Global UK services PMI business activity index was 52.8, up from 50.9 in May and the highest since August.
It was also ahead of the preliminary print of 51.3.
A reading below the neutral 50.0 benchmark indicates contraction, while one above it suggests growth.
As a result, the UK PMI composite output index rose nearly two points, to 52.0 from 50.3 in May.
The composite index is a weighted average of the manufacturing output index and services business activity index.
Respondents to the services PMI said input cost inflation had eased for the second month running and was now the lowest so far this year. Order books also improved during the month, with rising output levels attributed to improved business and consumer spending.
Headwinds remain, however, with respondents flagging subdued economic conditions in the UK, the impact of US tariffs and adverse geopolitical factors.
Tim Moore, economics director at S&P Global Market Intelligence, said the sector's "modest" rebound had been "fuelled by a turnaround in domestic business and consumer spending after a soft patch during the spring".
He continued: "While total new work picked up, shrinking export sales were a constraint on growth. Meanwhile, concerns about elevated payroll costs meant that service providers were reluctant to turn on the hiring taps."
The Bank of England next meets to decide on interest rates in August and today's survey will further support expectations for another cut.
So far this year the Monetary Policy Committee has cut rates twice to 4.25%, and the market has pencilled in another two reductions before the year end.
Moore said: "A combination of easing price pressures and lower employment leaves the door open for the BoE to resume its run of rate cuts in August."
Matt Swannell, chief economic advisor to the EY Item Club, said: "The composite PMI points to a modest expansion across the second quarter as a whole.
"The survey's readings tend to be heavily influenced by fluctuations in business sentiment rather than genuine change in private sector activity, but on this occasion, it appears likely that official GDP growth in Q2 will be broadly in line with the survey's findings."
Data were collected between 12 and 26 June from panel of around 650 service sector companies.
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