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UK private sector returns to growth in July as hiring lags
The S&P Global UK Services PMI rose to 52.1 and the Composite PMI climbed to 52.2, but employment fell for a 22nd straight month.
The UK’s private sector returned to growth in July, after two months of contraction, according to S&P Global survey data cited by Action Forex. The S&P Global UK Services PMI increased to 52.1 from 48.8 in June, and the Composite PMI rose to 52.2 from 49.3, marking the first expansion in overall business activity since April.
The report attributed the improvement to higher consumer spending and stronger demand for technology services. It also noted that manufacturing output recorded its strongest increase since September 2024, and that new business grew for the first time in five months, though the pace of growth remained modest versus historical standards.
Survey respondents said geopolitical uncertainty and the conflict in the Middle East continued to constrain demand, even as clients appeared less risk-averse than before. Business confidence improved for a second consecutive month to its highest level since February, as firms looked for easing inflation pressures and geopolitical tensions.
While the data points to some momentum, Action Forex said the labor market remained the weak spot, with employment declining for the 22nd consecutive month, matching the longest job-loss stretch in the survey’s three-decade history. Input cost inflation slowed to a five-month low, offering some relief, but stronger demand had not yet translated into sustained hiring.