UK Private Sector Activity Recovers

The S&P Global UK Composite PMI rose to 52.1 in July of 2026 from 49.3 in the previous month, rebounding from two months of contraction and well ahead market expectations of a 49.7, according to a flash estimate. The improved activity levels were supported by both manufacturing (53.6 vs 52.6 in June) and services (51.8 vs 48.8), with the latter recovering from declines in the second quarter after the war in Iran triggered a surge in energy prices, lifting operation costs and squeezing demand from consumers. The services sector was also boosted by hospitality as good weather and FIFA world cup games drove households to increase consumption. New work received by firm inched higher on the aggregate, with factories having the largest improvement in four years. Still, companies continued to go through backlogs. Meanwhile, the start of the month saw a drop in input costs amid logistics improvements from the Middle East, although high labor costs remained a pressure on headcounts.

The S&P Global UK Composite PMI fell to 49.3 in June of 2026 from 49.7 in May, revised from the flash estimate of 49.4 for a second month of contraction following 11 months of expansion in the British private sector activity. It contrasted with the initial expectations of an expansion at 50.6. Activity gauges contracted for services (48.8 vs 49.3 in May), outweighing the expansion for that of manufacturing (52.5 vs 53.9). Total private sector sales fell the most since April 2025 as a decline in services offset growth in manufacturing, even though the latter slowed. Likewise, backlogs of work increased sharply. Still, input price inflation eased for a second month as a modest de-escalation in the Middle East eased the upward pressure on energy prices, although cost growth remained above average. Output charge inflation also softened. Employment continued to fall at a fast rate, with workers still citing higher National Insurance contributions. Looking ahead, confidence improved.

The S&P Global UK Composite PMI eased to 49.4 in June of 2026 from 49.7 in May, a second month of contraction following 11 months of expansion in the British private sector activity, according to a flash estimate. This was below expectations of an expansion at 50.6. Activity fell for services (48.7 vs 49.3 in May), outweighing the faster expansion for goods producers (53.6 vs 52.2). Total private sector sales fell the most since April 2025 as a decline in services offset growth in manufacturing, even though the latter slowed to a six-month low. Likewise, backlogs of work increased the most in seven months. Still, input price inflation eased for a second month as a modest de-escalation in the Middle East eased the upward pressure on energy prices, although cost growth remained above average. Output charge inflation also softened. Employment continued to fall at a fast rate, with workers still citing higher National Insurance contributions.