UK Business Confidence Soars as Growth Hits 21-Month High
UK private sector firms started 2026 on a strong note, with the S&P Global Flash UK Purchasing Managersβ Index (PMI) jumping to 53.9 in January, up from 51.4 in December. Any reading above 50 signals expansion, and this latest result marks the fastest pace of growth in nearly two years, suggesting robust economic momentum early in the year.
The improved PMI reflects a broad upturn in business activity across both services and manufacturing. The services sector, including financial services and tech, led the charge with its strongest performance since April 2024, while manufacturers also reported rising output and the first growth in export orders in four years. This combined strength points to possible quarterly GDP growth approaching 0.4 per cent.
Business confidence has also climbed, with firms reporting their most upbeat outlook since before the 2024 Autumn Budget, driven by higher demand at home and abroad and clearer economic policy signals.
However, not all indicators were positive. Employment continued to fall in January, as firms reshaped workforces in response to rising cost pressures.
Overall, the PMI data paints a picture of resilient UK business activity and rising optimism, even as cost challenges and job losses temper the outlook.
