‘UK economy turned a corner’ as service industry continued growth in February

The influential S&P Global/CIPS UK services PMI survey showed a reading of 53.8 in February, as growth slowed marginally from 54.3 in January.

Services firms reported growth again in February (Jane Barlow/PA) (PA Archive)

The UK’s services sector grew again last month amid the fastest rise in new work for nine months, according to new figures.

Economists said the data suggests the “UK economy has turned a corner” after entering a recession last year.

The influential S&P Global/CIPS UK services PMI survey showed a reading of 53.8 in February, as growth slowed marginally from 54.3 in January.

It was the fourth consecutive month of growth for the sector.

Any reading above 50 indicates growth for the sector, and below means decline.

A turnaround in customer demand and the prospect of interest cuts on the horizon helped to boost business optimism across the service economy

Tim Moore, S&P Global Market Intelligence

The reading was nevertheless slightly lower than estimated in a “flash” reading late last month.

Tim Moore, economics director at S&P Global Market Intelligence, said: “Another solid expansion of business activity across the service sector in February adds to signs that the UK economy has turned a corner after entering a technical recession during the second half of 2023.

“New business intakes were a particularly bright spot as service providers reported the fastest order book growth since May 2023.

“Survey respondents cited rising business and consumer spending, linked to improved optimism towards the broader economic outlook.

“A turnaround in customer demand and the prospect of interest cuts on the horizon helped to boost business optimism across the service economy.”

The survey showed that business activity was supported by a “solid increase” in new order volumes, which rose at the fastest rate since May 2023.

Some firms also highlighted “rising business and consumer spending, linked to more supportive economic conditions”.

There was also a “modest” increase in staffing levels across companies in the service sector, with improved recruitment helping to drive higher capacity to serve customers.

Expectations for the year ahead also improved further, with the survey showing the highest rate of business optimism for two years.