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The UK service sector saw its weakest expansion in almost a year in March, as ‘rising global economic uncertainty’ hit new orders, a survey revealed on Tuesday. The S&P Global services purchasing managers’ index fell to 50.5 points in March from 53.9 in February, and below the 51.2 flash estimate. Moving closer to the 50 point neutral mark, the reading suggests growth in the service sector eased. S&P Global said it was the weakest PMI score since April 2025. ‘Higher output levels have been recorded in each of the past 11 months, but the latest expansion was only marginal and the weakest seen over this period. Some firms commented on a boost to activity from improved demand conditions at the beginning of 2026. However, many firms noted that the conflict in the Middle East had weighed on growth in March,’ S&P Global said. ‘Regional instabilities and rising global economic uncertainty led to a renewed decline in total new work received by UK service sector companies. This was the first downturn in order books since November 2025 and the pace of contraction was the sharpest for eight months.’ The conflict in the Middle East ‘delayed investment decisions’, survey respondents reported. ‘Service providers pointed to a robust increase in their output charges in March and the rate of inflation was also the strongest for 11 months. Business activity expectations for the year ahead remained positive in March, but optimism levels dropped further from January’s 15-month high. Survey respondents typically cited concerns about the duration of the war in the Middle East, especially in terms of its impact on the outlook for inflation, supply chains and borrowing costs,’ S&P Global said. The composite PMI, calculated using the services and the earlier manufacturing readings, fell to 50.3 in March from 53.7 in February. It was below the 51.0 flash estimate. S&P Global said: ‘Sector data signalled a loss of growth momentum in the service economy and a renewed downturn in manufacturing production. Average cost burdens increased at an accelerated pace in both the manufacturing and service sectors during March, with the former posting the steeper rate of inflation. Measured overall, input costs at UK private sector firms rose to the greatest extent since February 2023.’ Numbers last week Wednesday showed the UK manufacturing PMI posted 51.0 in March, down from 51.7 in February. It was also below the flash estimate of 51.4. The services PMI features a panel of around 650 companies, with responses collected in the second half of the month. Copyright 2026 Alliance News Ltd. All Rights Reserved.
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