FTSE 100 hits all-time high after US jobs report beats forecasts – as it happened

UK's blue-chip index has hit a new record high of 7906 points, helped by weak pound, and hopes that interest rates may be near their peak

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Despite the drop in activity in January, there are cautious signs of optimism on the horizon" for the UK's services sector, according to Dr John Glen, chief economist of the Chartered Institute of Procurement and Supply (CIPS)

On the drop in the UK Services PMI to a two-year low of 48.7 in January, Glen says:

The lag in business activity is a result of cautious budget setting, recession risk, and a drop in consumer spending. Winter is still biting for UK service providers.

But supply chain managers in the sector are clearly putting growth in their new year resolutions thanks to rebounding supply chains. Stabilising energy costs, combined with a resurgence in demand from the US and Asia, hint that the worst may be behind us.

The latest survey illustrates that the UK economy risks falling into recession as labour shortages, industrial disputes and higher interest rates take their toll on activity.

However, the downturn in service sector output remained relatively shallow at the start of 2023. Encouragingly, new order volumes moved closer to stabilisation and export sales picked up in January, which contributed to a marginal upturn in overall employment numbers.