Key facts
- Britain's services sector returned to growth in July, with the PMI rising to 52.1.
- New orders for UK services firms increased for the first time since February.
- Input cost and prices charged inflation eased in the UK services sector.
- Business confidence in the UK services sector reached its highest level since February.
- Euro zone business activity hit an eight-month high in July, with services expanding.
Britain's dominant services sector returned to growth in July, with new orders picking up and business expectations reaching their highest point since before the Iran war in February. The S&P Global UK Services Purchasing Managers' Index (PMI) rose to 52.1 from 48.8 in June, marking the first expansion since April.
The index of total new work among services firms increased to 50.8, the strongest since February, ending a four-month decline. While new export orders decreased for the fifth consecutive month, the pace of decline was the mildest in that period. Services firms reported the weakest increase in input costs since February, and prices charged rose at the slowest rate in five months.
Business confidence was the highest since February, with stronger growth projections partly reflecting hopes of de-escalating Middle East tensions and signs of easing inflationary pressures. The survey's employment gauge dropped for the 22nd consecutive month, though at the softest pace since October 2025.
Meanwhile, Euro zone business activity reached an eight-month high in July, driven by services, which expanded for the first time since March to a five-month high of 51.7. Overall new orders saw their fastest growth since November. Employment stabilized, ending a six-month decline, and business confidence rose. Euro zone inflation edged up to 2.9% in July, increasing the likelihood of further European Central Bank interest rate hikes.