𝓤𝓷𝓲𝓽𝓮𝓭 𝓝𝓮𝔀𝓼

Activity in the UK’s services sector rebounded last month on the back of improving consumer demand and easing price inflation, according to new figures.

The S&P Global UK services PMI survey showed a reading of 52.1 for July, up from 48.8 in June.

It marked the highest reading since April.

Any reading above 50.0 means the sector is growing while any reading below signals it is contracting.

Activity during the month was stronger than expected, with economists having predicted a 51.8 reading.

Tim Moore, economics director at S&P Global Market Intelligence, said: “UK service providers moved back into growth mode during July as greater consumer spending and strong demand for technology services helped to boost overall business activity.

“More supportive market conditions meant that new work picked up for the first time in five months, although the rate of expansion was still sluggish in comparison to historic trends.”

Firms reported that there was a “general improvement” in market conditions, highlighted by new work.

Some companies linked this to positive demand for technology services as well as a “tentative” recovery in consumer spending.

Global economic uncertainty linked to the Middle East conflict was nevertheless a drag on growth, according to surveyed firms.

The data showed that new business grew during July, ending four consecutive months of decline.

It came as companies also reported a further slowdown in price inflation, dropping to its lowest since February, supported by easing fuel costs.

However, Matt Swannell, chief economic adviser to the Item Club, predicted that the economy is still likely to “lose momentum in the second half of this year”.

He added: “Inflation has probably now passed its low point, with July’s 13% rise in the energy price cap kickstarting a series of upward pressures.

“This will put pressure on real disposable income, which we expect to decline in the second half.”