UK services firms face rising costs and weakening optimism amid Iran war
Companies in the United Kingdom's services sector experienced a sharp increase in operating costs in March, the largest month-to-month jump since 2021, according to a recent survey. Rising energy and transportation expenses were the primary drivers of the surge, highlighting inflationary pressures linked to the ongoing conflict in Iran.
The S&P Global Purchasing Managers’ Index (PMI) for services dropped to 50.5 in March from 53.9 in February, marking its lowest level in 11 months. Around 40% of firms reported higher input costs during the month. Tim Moore, Economics Director at S&P Global Market Intelligence, noted that many businesses were affected by suppliers passing on increased prices for energy, raw materials, and shipping.
The data reflects the broader economic impact of geopolitical tensions, with companies expressing caution about future growth prospects. Analysts warn that prolonged instability in the region could continue to drive up costs and dampen business confidence in the UK services sector.
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