The UK’s private sector has experienced a significant uptick in growth, reaching its fastest pace since April 2024, according to the latest S&P Global flash UK composite purchasing managers’ index (PMI) data. The index reported a reading of 53.9 in January, up from 51.4 in December, indicating a robust expansion in economic activity.
Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, commented on the findings, stating that “UK businesses kicked up a gear in January, showing encouraging resilience in the face of recent geopolitical tensions.” Firms have reported higher demand from both domestic and export markets, which has driven output growth to its strongest level in nearly two years.
The research also revealed that growth in the UK’s service industry reached a 21-month high in January. A number of surveyed firms said they benefited from post-budget clarity, allowing for new projects to begin and investment to flow. Manufacturing output also rose during the month, hitting its strongest levels since October, with some goods firms reporting improved export sales.
Thomas Pugh, Chief Economist at RSM UK, noted that the “sharp rise in the flash composite PMI suggests a decent post-budget bounce in activity is occurring as uncertainty dissipates.” This rebound in growth during the first quarter of 2026 is seen as a familiar pattern in the UK economy, potentially leading the Bank of England’s Monetary Policy Committee to wait until April before considering further interest rate cuts.
Overall, the data paints a picture of a resilient UK economy, with businesses demonstrating a willingness to invest and expand despite recent geopolitical challenges. The surge in activity across both the service and manufacturing sectors suggests a positive outlook for the country’s economic performance in the coming months.
