Tim Moore, economic director of S&P Global Mar

Aihucha News, September 5: Service providers saw a reversal in customer spending in August due to rising borrowing costs, weakening business confidence and strained household finances, all of which dampened sales opportunities. After a modest recovery over the past six months, services companies are now clearly feeling the impact of rising interest rates on customer demand. Concerns about wider business conditions also curbed spending in August, with businesses signaling that slowing UK economic growth and stubbornly high inflation were weighing on the outlook. The latest survey shows that the backlog of work has shrunk at the fastest pace in more than three years, further indicating that pressure on business capacity has eased. Service providers appear to have moderately halted hiring, with job creation falling to the lowest level since March. But August survey data provided a signal that rising competitive pressures are helping to push down output-cost inflation across the services economy, as the latest round of price increases was the slowest in two years.