According to the report from IHS Markit/CIPS, UK service providers signalled that the subdued start to the year continued into February, with business activity expanding only marginally and incoming new work falling for the second month in a row. Moreover, employment numbers declined at the fastest pace for over seven years as businesses opted to delay staff hiring in response to subdued demand and concerns about the near-term economic outlook. The main positive development in February was a slowdown in input cost inflation to its weakest since May 2018, which helped to provide some scope for promotional discounting.

The headline seasonally adjusted Services PMI Business Activity Index registered 51.3 in February, up from a two-and-a-half year low of 50.1 in January. However, the latest reading signalled only a marginal increase in service sector business activity. February data leaves the index on track for its weakest quarter since Q4 2012 (average reading 50.7 so far in the first quarter of 2019).