UK Private Sector Activity Unexpectedly Accelerates

The S&P Global UK Composite PMI rose to 52.5 in August from 52.5 in the previous month, firmly above market expectations that it would ease to 51.6, according to a flash estimate. The growth was bolstered by fresh traction for the services providing sector (52.8 vs 52.1 in July), which offset a slowdown in the manufacturing sector (51.2 vs 52.9). New orders at the aggregate level improved to the most since February, before the war in the Middle East started, driven by resilience in services. Still, staffing numbers dropped further to approach nearly two years of consecutive monthly declines, with employers continuing to cite surging labor costs due to new National Insurance contributions. Input costs for the private sector accelerated due to high fuel prices and wages, driving output charge inflation to rebound. Looking ahead, business expectations at the aggregate improved for a third month on improving margins since energy prices peaked in June.

The S&P Global UK Composite PMI rose to 52.2 in July 2026 from 49.3 in June, broadly matching the preliminary estimate of 52.1 and signaling the strongest expansion in private sector activity since April. The improvement was driven by renewed growth in services and the fastest increase in manufacturing output since September 2024. New business rose for the first time in three months, although employment continued to decline amid ongoing job losses in the services sector. Meanwhile, input cost inflation eased across both manufacturing and services, while output price inflation slowed to a five-month low.

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.