- Prior 53.4
- Composite PMI 52.9 vs 52.5 prelim
- Prior 52.1
The headline reading is the highest in eight months as UK business activity picks up further to start the new year. Adding to the good news is that inflation pressures are seen easing and that will help the BOE if the trend continues. S&P Global notes that:
"The revival in UK service sector performance gained momentum at the start of 2024, with output growth accelerating to its fastest for eight months amid stronger business and consumer spending. New orders have also rebounded this winter as receding recession risks and looser financial conditions led to greater willingness-tospend among clients.
"Inflationary pressures subsided during January, despite stronger demand conditions. Latest data indicated that total input costs increased at one of the slowest rates seen in the past three years. Softer cost inflation reflected lower energy and fuel costs, alongside falling raw material prices.
"Service providers reporting an increase in their operating expenses overwhelmingly linked this to elevated wage pressures. This resulted in another month of robust rise in average prices charged, although the speed of inflation dipped to a four-month low.
"A combination of falling inflation and improving order books provided a strong boost to business activity expectations across the service economy. The degree of optimism regarding year ahead growth prospects was the highest since April 2023. Another uplift in business confidence in January provides a signal that elevated levels of geopolitical uncertainty have yet to exert much of a constraint on service sector growth projections for 2024."
