UK Services Sector Sees Growth Amidst Economic Challenges

Britain's services sector showed signs of growth in March, according to the latest S&P PMI survey, reaching a seven-month high. The manufacturing sector, however, continued to struggle, with its PMI hitting an 18-month low. The composite PMI suggests modest economic growth despite various challenges facing British businesses.

In March, businesses within Britain's significant services sector experienced an uptick, according to recent survey results. The findings offer a degree of comfort to finance minister Rachel Reeves, who is preparing for a formidable speech concerning the economy and public finances.

The preliminary reading of the UK S&P Purchasing Managers' Index (PMI) for the services sector hit a seven-month high of 53.2, improving from February's 51.0. However, the smaller manufacturing PMI fell to an 18-month low, igniting concerns related to a potential global trade war spurred by U.S. President Donald Trump's tariffs.

Amidst these fluctuations, retailers mentioned investment in automation to handle an imminent increase in taxes and a 7% rise in the minimum wage. Yet, optimism remains tempered, as British firms anticipate further difficulties with the enactment of U.S. tariffs and other economic pressures.

(With inputs from agencies.)