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The S&P Global UK services PMI survey scored a reading of 51.3 in November, dipping from 52.3 in October.
Henry Saker-ClarkWednesday 03 December 2025 11:27 GMT
UK inflation is expected to remain above the 2% target when official figures for August are released on Wednesday amid a resurgence in price pressures across the key services sector (Alamy/PA)
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Growth in the UK services sector slowed down last month amid softer consumer demand, according to new figures.
Meanwhile, price inflation in the sector eased to its lowest level for almost five years.
The S&P Global UK services PMI survey scored a reading of 51.3 in November, dipping from 52.3 in October.
Any reading above 50.0 means the sector is growing while any score below means it is contracting.
The closely-watched survey was stronger than expected, with analysts predicting a 50.5 reading for the month.
Tim Moore, economics director at S&P Global Market Intelligence, said: “November data revealed an abrupt end to the steady improvement in order books seen since the summer.
“Unfavourable demand conditions were signalled in both domestic and export markets.
“Lower workloads led to a renewed slowdown in business activity growth across the UK service economy, with the latest expansion much softer than the post-pandemic trend.”
The survey data showed a slowdown in growth as service sector firms commented on “growth headwinds due to subdued business and consumer confidence”.
Companies specifically noted that uncertainty ahead of the Budget last week had resulted in delays to investment decisions and cautious spending.
Order books also declined over the month on the back of a “lack of willingness” to commit to new projects, the research found.
Firms also highlighted that reduced backlogs of work and higher employment costs contributed to another fall in staff numbers, with the sharpest fall since February.
Elsewhere, the data showed the rate of prices charged by companies in the sector eased sharply as firms sought to offset easing demand.
Inflation on price charged slowed to its lowest level since January 2021.
Matt Swannell, chief economic adviser to the EY Item Club, said: “The survey was conducted before the autumn Budget and concerns around possible tax rises weighed on business sentiment.
“Easing cost and price pressures along with a deteriorating growth outlook are paving the way for an interest rate cut before the Christmas break.
“Although interest rates were kept unchanged at the Bank of England’s November meeting, the decision was finely balanced and it was clear that a majority of the committee anticipated having to reduce interest rates further.”
