The UK's final services Purchasing Managers' Index (PMI) for May has been revised to 49.3, indicating a contraction in business activity for the first time since April 2025. This decline is attributed to a combination of subdued demand from both domestic and international markets, as well as rising input costs. Tim Moore, Economics Director at S&P Global Market Intelligence, highlighted that the service sector has experienced a notable reversal, with many companies citing the impact of geopolitical tensions, particularly the conflict in the Middle East, on their sales pipelines. The hospitality and transportation sectors reported challenges due to squeezed discretionary spending, while professional services firms faced setbacks from increased risk aversion among clients. Although input price inflation eased slightly compared to April, it remains at its highest level since the energy crisis in 2022. Business activity expectations have also diminished, reaching a 13-month low as concerns about prolonged inflation and geopolitical uncertainties weigh heavily on the sector's outlook. Despite these challenges, investment in technology services is noted as a bright spot within the service economy.