• Composite PMI 58.2 vs 57.6 prelim

The UK services sector remains firmly in growth territory but there are some worrying signs as input cost  inflation  surges to a record high and new order growth seen slowing amid the more intense cost pressures. Business confidence was also seen at its lowest in a year-and-a-half. S&P Global notes that:

“The twin headwinds of the cost of living crisis and the war in Ukraine started to bite on the UK service sector during April, as evidenced by a sharp slowdown in new order growth to the lowest in the year so far. Worryingly, companies seem to be expecting impacts to be prolonged, with business confidence dropping to the lowest in a year-and-a-half.

"Indeed, cost pressures show little sign of abating, with inflation even accelerating in April to the strongest in almost 26 years of data collection. The feeding through of these cost pressures to charges for customers means that the spell of rapid inflation clearly has further to run.

"While the aforementioned headwinds are of concern, companies were still able to generate growth of activity and new work as the sector continued to benefit from the relaxation of COVID-19 measures and in particular the easing of travel rules. Firms will be hoping that these benefits are not completely drowned out by the hit to demand from the cost of living crisis in particular."