FX.co ★ UK Private Sector Activity Slows More than Expected

The S&P Global Composite PMI for the UK decreased to 51 in July 2025, down from 52 the previous month, falling short of market predictions that it would only slightly decrease to 51.8. Nevertheless, it remained firmly in expansionary territory for the third consecutive month, as indicated by a flash estimate. This growth was primarily driven by the services sector, which improved to 51.2 from 48.2 in June. This gain helped counterbalance a milder decline in the manufacturing sector, which stood at 48.2 compared to 47.7 previously.

Overall output increased month-over-month despite diminishing backlogs of work, as new orders saw their steepest drop since April, largely due to weaker export sales influenced by tariff pressures from the United States. As a result, private sector employment declined for the tenth straight month, with businesses highlighting rising payroll and labor costs following the recent budget increase in National Insurance contributions. The surge in labor costs led to an uptick in prices, marking the first acceleration since April. Looking forward, firms remain optimistic regarding future business activity.