UK September final services PMI 49.3 vs 47.2 prelim

<ul><li>Prior 49.5</li><li>Composite PMI 48.5 vs 46.8 prelim</li><li>Prior 48.6</li></ul><p>That's a decent revision higher but it still sees the weakest performance in the UK services sector in eight months, but at least the contraction was marginal. The other good news at least is that inflation pressures were marked down to their lowest in nearly 2½ years. S&amp;P Global notes that:</p><p>"Service sector activity remained on a negative trajectory
in September as cutbacks to non-essential business and
consumer spending weighed on sales volumes. Although
only modest and slower than indicated by the earlier 'flash'
PMI reading, the downturn in UK service sector output was
the greatest seen since the beginning of this year and stood
in contrast to solid growth during the spring months.
</p><p>"Survey respondents often suggested that a combination of
elevated borrowing costs and subdued economic conditions
had led to lower new business intakes. A renewed decline in
export sales also acted as a headwind to order books during
September, led by weaker demand across Europe.
</p><p>"Service providers responded to lower volumes of new
work and falling backlogs by putting the brakes on hiring
plans in September. Some firms noted that strong wage
pressures had led to the non-replacement of voluntary
leavers. Measured overall, service sector payroll numbers
decreased at the fastest pace since January 2021.
</p><p>"The latest survey data provided encouragement that
headline rates of inflation will continue to moderate in the
coming months, with service sector input costs rising at the
slowest pace for nearly two-and-a-half years. There were
reports that higher fuel prices and wage bills had pushed
up prices charged across the service economy, but service
firms often suggested that competitive pressures had
eroded pricing power.
</p><p>"An expectation of sustained falls in UK consumer
price inflation and a subsequent turnaround in demand
conditions, appeared to support business optimism in
September. Output growth projections across the service
economy edged up to a three-month high and were much
higher than seen at the same time in 2022."</p>

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