LONDON, May 6 (Reuters) – British services firms last month reported the sharpest acceleration in cost pressures in three-and-a-half years as the Iran war drove up prices for fuel \u200cand raw materials, a closely watched survey showed on Wednesday.<\/p>\n
The wider S&P Global Purchasing \u200cManagers’ Index for the services sector rose to 52.7 from March’s 50.5 – slightly higher than the 52.0 initially reported for \u200bApril. A reading below 50 signals contraction, while one above 50 signifies growth.<\/p>\n
S&P Global said its gauge of input cost inflation for British services companies increased in April to its highest since November 2022, in the aftermath of Russia’s full-scale invasion of Ukraine. Companies said higher transport costs and salaries \u200ccontributed to the surge.<\/p>\n
More than half \u2060of firms reported an increase in their average cost burdens in April.<\/p>\n
The Bank of England is closely watching measures of input prices and prices charged by \u2060businesses as it tries to assess whether the inflation impulse from the Iran war will last long enough to require interest rate hikes.<\/p>\n
Prices charged by businesses also rose at the fastest pace in more \u200bthan three \u200byears as they passed on higher fuel costs to \u200bcustomers.<\/p>\n
The monthly survey underscored the impact \u200con Britain’s economy from the U.S.-Israeli war with Iran, which began in late February.<\/p>\n
“April data signalled a modest recovery in UK service sector output growth after the considerable loss of momentum seen in March,” said Tim Moore, economics director at S&P Global Market Intelligence.<\/p>\n
“However, this improvement could easily prove short-lived as new business intakes remained subdued in comparison to the start of 2026.”<\/p>\n
Business sentiment about \u200cthe year ahead edged up slightly last month from March’s \u200bnine-month low, but firms remained concerned about the economic \u200boutlook and inflationary pressures caused by the \u200bconflict.<\/p>\n
While hiring contracted for the 19th month in a row, S&P said the \u200cpace of job cuts was its slowest \u200bsince October. Firms said \u200bthat was in part due to the non-replacement of voluntary leavers, worries about higher costs, and the impact of the Middle East conflict on demand.<\/p>\n
Nonetheless, survey respondents reported weak domestic \u200band overseas demand in April.<\/p>\n
The \u200ccomposite PMI, which includes last week’s manufacturing data, was revised up to 52.6 from \u200bthe preliminary reading of 52.0 and up from a six-month low of 50.3 in \u200bMarch.<\/p>\n
(Reporting by Suban Abdulla; Editing by Joe Bavier)<\/p>\n","protected":false},"excerpt":{"rendered":"LONDON, May 6 (Reuters) – British services firms last month reported the sharpest acceleration in cost pressures in…\n","protected":false},"author":2,"featured_media":29893,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[13039,24,1992,5,13040,6],"class_list":{"0":"post-29892","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-uk","8":"tag-british-services","9":"tag-iran","10":"tag-sp-global","11":"tag-uk","12":"tag-uk-service-sector","13":"tag-united-kingdom"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@UnitedKingdom\/116527363684750822","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/posts\/29892","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/comments?post=29892"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/posts\/29892\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/media\/29893"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/media?parent=29892"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/categories?post=29892"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/tags?post=29892"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}