UK PMI rises in August as services lead growth, manufacturing falters

A broad rebound in the United Kingdom’s private sector cooled the worst of the spring lull in August, with the latest Flash PMI showing the composite index at a one-year high as services led growth and manufacturing remained subdued. The preliminary reading points to a still-fragile demand environment, with firms continuing to trim staff and facing higher input costs as policy changes and broader geopolitical uncertainty weigh on sentiment.

The composite PMI rose to 53.0, its strongest level in about a year, driven primarily by the services sector. Businesses in hospitality, finance, and consumer-facing industries reported stronger demand and rising sales both at home and abroad. However, manufacturing continued to contract, signaling a split in the economy where services bolster the headline figure even as factory output remains under pressure. Employment trends echoed that divide: total workforce numbers declined for the eleventh consecutive month as firms pared hiring in response to cost pressures and uncertain demand. Input cost inflation also picked up, driven by higher prices for goods such as food, transport, and shipping, and even as some of those costs were passed...