Economic Buzz: UK service sector marginal growth continues in December

UK service providers indicated a rise in business activity for the eighth successive month. However, the pace of expansion was only marginal and little-changed since November. At 51.4 in December, up fractionally from 51.3 in the previous month, the headline seasonally adjusted S&P Global UK Services PMI Business Activity Index remained much weaker than its long-run trend (54.2). The index was also lower than the earlier 'flash' reading of 52.1 in December.

Survey respondents continued to report challenging business conditions, sales headwinds from subdued UK economic prospects, as well as constrained client spending linked to domestic political uncertainty.

That said, some firms commented on tentative signs of a recovery in client confidence after a prolonged phase of anxiety in the lead up to the Budget.

December data pointed to a renewed upturn in total new work, following a marginal decline during the previous survey period. Although only modest, the rate of new business expansion was much faster than the average seen in 2025 as a whole.

The seasonally adjusted S&P Global UK PMI Composite Output Index registered 51.4 in December, up slightly from 51.2 in November and above the neutral 50.0 threshold for the eighth consecutive month.

Manufacturers and service providers both indicated marginal expansions of business activity at the end of 2025. This was supported by a moderate rebound in total new work across the private sector economy.

However, employment numbers continued to fall at a solid pace. Input price inflation accelerated for the second month running to its highest since May. Another steep increase in average cost burdens in turn led to the fastest rise in output charges for four months in December.

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