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UK service sector activity contracted in May for the first time in more than a year as weaker demand, rising inflation and uncertainty linked to the conflict in the Middle East weighed on business activity, survey data showed on Wednesday. The S&P Global UK services PMI business activity index fell to 49.3 points in May from 52.7 in April, dropping below the 50-point threshold that separates growth from contraction for the first time since April 2025. The reading was above the flash estimate of 47.9 published on May 1 but was much weaker than the long-run survey average of 54.2 points. S&P Global said lower activity levels were linked to subdued consumer spending, particularly in the travel, tourism and leisure sectors, as well as reduced business investment amid heightened economic and political uncertainty. The lack of new work contributed to the fastest decline in backlogs of work since November 2025, while service providers reduced staffing levels at the quickest pace since February. Companies also continued to face sharp cost pressures. Input price inflation remained close to April’s 41-month high, driven by rising energy, fuel and transportation costs. The broader S&P Global UK composite PMI output index, which combines manufacturing and services activity, fell to 49.7 points in May from 52.6 in April, and came below the 48.5-point flash reading. S&P Global Market Intelligence Economics Director Tim Moore said: ‘UK service sector companies signalled a reversal of fortunes in May as business activity fell into contraction after showing some resilience earlier this spring.’ ‘Many service sector companies noted that the Middle East conflict had an adverse impact on sales pipelines and general business prospects,’ he added. On Monday, the S&P Global eurozone manufacturing purchasing managers’ index rose to 53.9 points in May from 53.7 in April. The S&P Global UK services PMI is compiled by S&P Global from responses to questionnaires sent to a panel of around 650 service sector companies, with survey data collected during the second half of each month. Copyright 2026 Alliance News Ltd. All Rights Reserved.
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