UK January final services PMI 54.3 vs 53.8 prelim

<ul><li>Prior 53.4</li><li>Composite PMI 52.9 vs 52.5 prelim</li><li>Prior 52.1</li></ul><p>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&amp;P Global notes that:</p><p>"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.
</p><p>"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.
</p><p>"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.
</p><p>"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."</p>

This article was written by Justin Low at www.forexlive.com.