Prior 51.3Final Composite PMI 51.4 vs 52.1 prelimPrior 51.2Key findings:Business activity expansion remains marginal
Renewed upturn in new orders
Input cost inflation accelerates to seven-month highComment:Tim Moore, Economics Director at S&P Global Market
Intelligence, said:
“Lacklustre business activity growth continued across
the UK service sector at the end of 2025. Moreover, the
speed of expansion was softer than signalled by the
earlier ‘flash’ survey in December and lower than seen
on average in the second half of the year.
“The most positive development was a renewed upturn
in new business intakes, following a slight decline during
November. Modest growth of incoming new work was
attributed to tentative signs of a recovery in client
confidence after an extended period of pre-Budget
gloom. Order books were also supported by a marginal
rebound in export sales.
“However, survey respondents still noted sales
headwinds linked to weak UK economic prospects,
alongside challenging operating conditions due to
factors such as sharply rising business costs and soft
demand in major overseas markets. Worries about
squeezed margins and broader growth prospects
contributed to another marked reduction in service
sector employment during December.
“Meanwhile, inflationary pressures across the service
economy strengthened at the end of the year. Input
prices rose to the greatest extent for seven months, and
output charge inflation rebounded from November’s
recent low, despite the subdued demand backdrop.”
This article was written by Giuseppe Dellamotta at investinglive.com.
💡 DMK Insight
The slight dip in the Composite PMI to 51.4 signals a cooling in business activity, and here’s why that matters: A PMI reading above 50 indicates expansion, but the drop from the preliminary 52.1 suggests that growth is slowing, which could lead to cautious sentiment among traders. The uptick in new orders is a silver lining, but with input cost inflation hitting a seven-month high, margins could be squeezed, impacting profitability. This scenario might prompt traders to reassess their positions in UK equities and the GBP, especially if the inflation trend continues. Watch for how the Bank of England reacts in upcoming meetings, as any hints at policy shifts could create volatility in the forex market. On the flip side, if the new orders trend continues, it could provide a foundation for future growth, making it essential to monitor this metric closely. Key levels to watch in the GBP/USD pair would be around recent support and resistance levels, as a break could signal a shift in market sentiment.
📮 Takeaway
Traders should monitor the GBP/USD pair closely, especially if new orders continue to rise, as this could influence future market sentiment and Bank of England policy.






