UK January final services PMI 48.7 vs 48.0 prelim

• Composite PMI 48.5 vs 47.8 prelim

The higher revisions in the final report doesn't take away from the fact that overall activity is on the decline from December as economic risks stay heightened in the UK. Of note, the services sector has been in contraction for the fourth straight month now and overall demand conditions remain rather subdued. S&P Global notes that:

"January data pointed to the weakest service sector performance for two years as cutbacks to business and consumer spending resulted in a fourth consecutively monthly reduction in output levels. The latest survey illustrates that the UK economy risks falling into recession as labour shortages, industrial disputes and higher interest rates take their toll on activity.

"However, the downturn in service sector output remained relatively shallow at the start of 2023. Encouragingly, new order volumes moved closer to stabilisation and export sales picked up in January, which contributed to a marginal upturn in overall employment numbers.

"Intense pressure on costs from rising energy bills and tight labour market conditions led to another sharp rise in business expenses. Cost pressures are still higher than at any time in the two decades prior to the pandemic, but the overall rate of inflation eased to its lowest since August 2021 as reduced fuel prices offered some relief.

"Hopes of a sustained drop in input cost inflation Inflation Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Read this Term, alongside more favourable energy market trends and fewer concerns about the global economic outlook, helped to boost business activity expectations for the year ahead to the strongest reported since April 2022."