Business activity across the UK’s private sector lost pace in July, with early data signalling a slowdown in growth and a sharper wave of job cuts. The S&P Global flash composite PMI dropped to 51 from June’s nine-month high of 52, suggesting marginal growth that fell short of economists’ expectations.
Service industries remained the primary growth driver, supported by increased consumer spending. However, firms in the sector flagged persistent uncertainty and fragile domestic conditions as limiting factors.
Manufacturing output levelled off after eight months of contraction. Still, producers continued to struggle, particularly in export markets affected by US trade policies. New orders across the private sector declined for a third consecutive month, reaching their weakest level since April.
Employment fell at its fastest pace since February, with staff reductions reported in both services and manufacturing. Firms pointed to rising labour costs, driven by recent increases in national insurance and minimum wage, as a key factor behind workforce restructuring. Business confidence remained subdued, weighed down by a combination of cost pressures, slowing demand, and the lingering effects of fiscal measures announced in last autumn’s budget.
