S&P Global Market Intelligence chief economist Tim Moore said UK services output
expanded modestly in September but at a slower pace than in August. Weak demand
and rising inf have damped firms' business expectations for the year ahead. New
orders rose only marginally in September, the weakest pace in three months.
Firms cited geopolitical tensions, tighter household budgets and higher
borrowing costs as headwinds to sales. Tech services demand remained resilient.
Some firms continue layoffs and cost-cutting; services employment has fallen for
a second consecutive year, though the reduction in jobs in September was the
smallest since October 2025. Hiring demand exceeded available labor supply,
helping to underpin the jobs market. Middle East conflict-driven fuel price
spikes pushed input-cost inf higher in September, prompting services firms to
raise prices at the fastest pace since May and heightening concern about an
economic slowdown around mid-2026.
