UK services growth slowed in September as surging fuel and energy costs pushed companies to raise prices at the fastest pace since May, underscoring the inflationary pressure facing the economy.
The S&P Global UK services purchasing managers’ index fell to 52.1 from 52.5 in August. A reading above 50 indicates expansion, meaning the sector continued to grow for a third consecutive month, although at a slightly weaker pace.
The latest reading was nevertheless stronger than the preliminary estimate of 51.7, suggesting underlying activity remained relatively resilient despite mounting cost pressures.
Companies surveyed by S&P Global reported that higher fuel prices and rising staff pay were driving up their operating costs. Businesses responded by passing more of those increases on to customers in an effort to protect profit margins.
The increase in prices charged was the fastest recorded by the survey since May, marking a reversal in the moderation of services inflation seen earlier in the year.
“Surging fuel prices due to the Middle East conflict continued to drive up input cost inflation in September,” said Tim Moore, economics director at S&P Global Market Intelligence.
“This led to the sharpest increase in prices charged by service sector companies since May and therefore signalled a clear reversal of the slowdown seen in the middle of 2026.”
The figures add to concerns that renewed energy shocks could complicate the outlook for monetary policy. Higher fuel costs can feed through from businesses into consumer prices, potentially prolonging inflationary pressure even as economic activity weakens.
The services sector accounts for the largest share of UK economic output and encompasses industries ranging from hospitality and leisure to financial services, healthcare, transport and property.
The survey also showed that companies continued to cut jobs in September, extending a run of employment reductions to two years. The pace of job losses was the slowest for almost a year, however, offering some evidence that labour market pressures may be easing.
For policymakers, the combination of slowing activity, persistent job cuts and renewed price pressures presents a difficult balance: weaker growth argues for restraint, while higher costs threaten to keep inflation elevated.
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