London, Feb 20, 2026, 13:59 GMT
- UK flash composite PMI rises to 53.9, the strongest since April 2024
- Factory output and export orders accelerate, while services growth cools slightly
- Employment falls for a 17th straight month as firms cite cost pressure
Britain’s private sector expanded at its fastest pace in almost two years in February, a flash business survey showed on Friday, even as companies cut jobs again. (Forex Factory)
The reading adds to signs the economy is finding its feet early in 2026, after a weak end to last year, and keeps attention on whether the Bank of England can start lowering borrowing costs in the coming months.
The data also lands ahead of Chancellor Rachel Reeves’ March 3 budget update, with investors watching whether firmer activity feeds into tax receipts without reigniting inflation pressure.
S&P Global’s flash composite output index rose to 53.9 from 53.7 in January, staying above the 50 line that separates growth from contraction. Services eased to 53.9 from 54.0, while manufacturing picked up, with the output index jumping to 53.6 and the headline factory PMI rising to 52.0. (Investing.com India)
“The early PMI data for February bring further signs of an encouraging start to the year for the UK economy,” said Chris Williamson, S&P Global’s chief business economist. He said the survey was consistent with GDP rising by just over 0.3% in the first quarter if momentum holds into March. (Reuters)
Jake Finney, a senior economist at PwC, said the economy had “held on to the momentum” seen at the start of the year, but employment “still stands out” as a weak spot. (Pound Sterling Live)
Staffing levels fell for a seventeenth straight month, led by services, with firms pointing to redundancies, hiring freezes and pressure on margins. Some companies said they were leaning more on technology and productivity drives to expand without adding headcount.
Price signals stayed uncomfortable. Input costs rose sharply in February, though the pace eased, and firms lifted selling prices at the fastest rate since April 2025, driven mainly by services.
Retail sales offered a clearer demand boost. Sales volumes rose 1.8% in January, the biggest monthly increase since May 2024, helped by artwork and antiques and strong online jewellers, official data showed. (Office for National Statistics)
Public finances also improved sharply at the start of the year, with the public sector posting a £30.4 billion surplus in January — the biggest for any month since records began in 1993 — the Office for National Statistics said. The ONS said receipts were lifted by self-assessed income and capital gains taxes, and noted employer National Insurance contribution rate changes took effect on April 6, 2025. (Office for National Statistics)
Across the Channel, euro zone business activity strengthened too, but trailed Britain, with the flash composite PMI at 51.9 as manufacturing returned to growth. Germany led the pick-up while France remained sluggish, the survey showed. (Reuters)
But the UK survey came with warning flags: backlogs of work kept shrinking and jobs fell again, suggesting many firms still have spare capacity and little appetite to hire even as orders improve.
