UK DATA: Services PMI revised higher - and cost pressures remain concerning

Not a lot in the press release to really give away the reason for the 0.8 point revision higher in the services PMI from 50.0 to 50.8 (note the survey is only open an extra 2 days versus the flash).

• This part on costs still the most important for monetary policy - confirming that firms are passing on cost increases again - which could be a concern with the upcoming employer NIC increase and national living wage increases (both coming in April). We continue to expect quarterly cuts in Feb and May, with the pace thereafter determined by the wage data and extent of services CPI passthrough (in the annual increases - which will be more evident by June).
• From the press release: "The latest survey data indicated a sharp increase in input prices across the service economy. The rate of cost inflation accelerated to the fastest since April. Efforts to pass on rising salary payments, and other business expenses, including energy bills, insurance costs and technology expenditure, all contributed to a steeper rise in output charges. The overall rate of prices charged inflation edged up to its highest since July."