The economy looks to likely to have had a reasonably solid end to the first quarter. The 52.9 the flash composite output index was trimmed just 0.1 point to a final 52.8, now 0.2 points below February's 9-month high but still well above the 50-expansion threshold.

Overall growth remains largely courtesy of services where the 53.4 flash sector PMI was revised to 53.1, down from a final 53.8 in mid-quarter but still well above the 50 mark. However, the gap between it and its manufacturing counterpart (50.3) has narrowed significantly, suggesting a much better balance to the economy.

Within services, new orders increased at a moderate pace as did headcount while backlogs fell only marginally. Input costs rose again, mainly on the back of higher wages, but this left the inflation rate trending sideways and well above its pre-pandemic level. Output prices also increased at a solid clip although inflation here still fell to its weakest rate since September 2023. Business expectations about the year ahead similarly eased but were higher than at any other time since February 2022.

In sum, the revised March report would still seem to indicate that the UK economy pulled out of recession last quarter. Taken together with some stubbornly firm inflation signals, the data argue against a cut in Bank Rate as soon as May. The UK RPI and RPI-P now stand at 7 and 17 respectively, showing that economic activity in general is running just slightly ahead of forecasts.

No revisions are expected leaving the composite output index at 52.9, little changed from February's final 53.0.

The Services Purchasing Managers' Index (PMI) provides an estimate of service sector business activity for the preceding month by using information obtained from a representative sector survey incorporating transport and communication, financial intermediation, business services, personal services, computing and IT and hotels and restaurants. Results are synthesised into a single index which can range between zero and 100. A reading above (below) 50 signals rising (falling) activity versus the previous month and the closer to 100 (zero) the faster is activity growing (contracting). The data are compiled by the Chartered Institute of Purchasing and Supply (CIPS) and S&P Global.

Investors need to keep their fingers on the pulse of the economy because it dictates how various types of investments will perform. By tracking economic data such as the ISM non-manufacturing index in the U.S. and the S&P Global PMIs elsewhere, investors will know what the economic backdrop is for the various markets. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers less rapid growth and is extremely sensitive to whether the economy is growing too quickly and causing potential inflationary pressures.

The S&P Global PMI services data give a detailed look at the services sector, how busy it is and where things are headed. The indexes are widely used by businesses, governments and economic analysts in financial institutions to help better understand business conditions and guide corporate and investment strategy. In particular, central banks in many countries use the data to help make interest rate decisions. PMI surveys are the first indicators of economic conditions published each month and are therefore available well ahead of comparable data produced by government bodies.