UK private sector activity sees strongest upturn since April 2024
By Michele Maatouk
Date: Friday 23 Jan 2026
(Sharecast News) - Business activity in the UK private sector saw its strongest upturn in January since April 2024, according to a survey released on Friday.
The S&P Global flash UK PMI composite output index rose to 53.9 from 51.4 in December. This marked the ninth reading in a row that the index was above the 50.0 mark that separates contraction from expansion. It was also the highest since April 2024.
The flash UK PMI business activity index for the services sector ticked up to a 21-month high of 54.3 in January from 51.4 the month before, while the manufacturing PMI increased to 51.6 from 50.6.
Chris Williamson, chief business economist at S&P Global Market Intelligence, said: "UK businesses kicked up a gear in January, showing encouraging resilience in the face of recent geopolitical tensions. Companies are reporting higher demand, both from home and export markets, which has driven output growth to the fastest since April 2024. Firms are also reporting the greatest optimism about the business outlook since before the 2024 Autumn Budget.
"The January flash PMI is up to a level indicative of a robust quarterly GDP growth approaching 0.4%. "While growth continues to be driven by the service sector, and in particular financial services and tech, the manufacturing sector is also continuing to report a gathering recovery aided by resurgent demand, with goods exports notably rising for the first time in four years."
He added, however, that the upturn in order books failed to stem a steep loss of jobs, which companies blamed on the need to reduce high costs.
Jake Finney, senior economist at PwC, said: "The January PMI data suggest the UK economy has started the year on much firmer footing, with activity picking up strongly across the private sector. Greater post-Budget clarity appears to be helping unlock private sector investment, particularly in services.
"At face value, the figures imply the UK economy has weathered geopolitical disruption so far, with the PMI consistent with GDP growth of over 1.5% in 2026. That said, the timing of the survey means recent developments in Greenland are unlikely to be fully reflected. It remains an open question whether improving economic fundamentals will continue to trump geopolitical risk over the year ahead.
"The relative strength in business activity is tempered by renewed concerns around cost pressures. The latest PMI readings show little evidence that input cost pressures are easing, particularly in services, adding further weight to the view that the Bank of England is likely to keep rates on hold in February. While a cut later in the spring remains possible, persistent services-sector cost pressures mean a March move is far from certain."
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