UK private sector growth accelerated in August to its strongest pace in a year in August, driven by robust service sector activity, flash survey data from S&P Global showed on Thursday. The Flash UK Composite Output Index rose to 53.0 in August from 51.5 in July, marking a fourth straight month above the 50.0 growth threshold and the fastest expansion since August 2024. Service providers reported improved domestic and export demand, lifting new business volumes at the sharpest rate in 10 months. In contrast, manufacturers faced the steepest drop in orders since April, citing weak global demand and uncertainty over US tariffs. Employment fell for the 11th consecutive month as firms in both manufacturing and service sectors cut payrolls in response to higher costs. Input cost inflation quickened to its highest since May, with companies citing higher National Insurance contributions, food prices and freight costs. Prices charged by private sector firms rose sharply in August, led by the service sector, though factory gate price growth slowed to its weakest since January due to subdued demand and competition. Despite ongoing cost pressures and job losses, business optimism improved to its highest since October 2024, with service firms anticipating stronger investment and consumer spending, while manufacturers expressed hopes of a tentative demand recovery. Attribution: Amwal Al Ghad English Subediting: M. S. Salama
