According to the report from IHS Markit/CIPS, the growth of activity in the UK services sector accelerated to an 8-month high in February, but was below economists' forecasts. The growth rate of new orders also accelerated compared to January, helped by an increase in employment, while inflationary pressures also intensified.
UK Services PMI rose to 60.5 points in February from 54.1 points in January. The last value was the highest since June 2021. However, economists had expected the index to rise to 60.8 points.
Respondents stated that amid the improvement of the situation around the pandemic, an increase in market demand and customer confidence was recorded. New orders growth also accelerated compared to January, and reached the highest level in 8 months, while the growth rate of new export orders was the highest in the history of the survey (since September 2014). Amid the improvement in the situation, the number of jobs also increased, while the growth rate was the most significant since October 2021. As for backlogs of work, they grew at the fastest pace in seven months. Input costs increased substantially in February, with the rate of inflation the second-fastest in more than a quarter of a century of data collection. Meanwhile, the growth rate of selling prices has reached a record high.