The UK composite index rose from 52.3 in June to 52.8 in July. This indicates a moderate expansion in private-sector economic activity and is partly due to increased demand which led to increased output. Exports also increased, along with employment which reached a 13-month high. Input costs also rose sharply in July, however, output costs rose at a much slower pace.

The service index also rose in July, albeit modestly from 52.1 in June to 52.5. This is a modest increase in expansion compared to June and marked the first time since April that the service index has grown. This is due to a rise in sales volume, demand, and new customers. With demand ramping up, UK service companies raised employment.

Price pressures remained high across the UK services economy. Increases in input costs and output prices remain well above their respective pre-pandemic averages. However, rates of inflation for input prices and output charges were among the lowest seen in around three-and-a-half years.

The UK RPI now stands at plus 4 and RPI-P at 0, both showing economic activity generally is within market forecasts.

No revisions are expected leaving the headline composite output index at 52.7, up from June's final 52.3.

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.