UK private sector growth slows, job cuts accelerate in July
By Michele Maatouk
Date: Thursday 24 Jul 2025
(Sharecast News) - Growth in the UK private sector slowed in July, while job cuts accelerated, according to a preliminary survey released on Thursday.
The S&P Global flash PMI composite output index - which measures activity in both the services and manufacturing sectors - fell to a two-month low of 51.0 from 52.0 in June. This was below the 51.8 expected by economists but above the 50.0 mark that separates contraction from expansion.
The flash manufacturing output index printed at 50.0 in July, up from 47.0 in June and hitting a nine-month high.
However, the services PMI business activity index fell to 51.2 this month from 52.8 in June, hitting a two-month low.
The survey also showed that the rate of job shedding accelerated to its fastest since February amid steeper reductions in both sectors.
Chris Williamson, chief business economist at S&P Global Market Intelligence, said: "The flash UK PMI survey for July shows the economy struggling to expand as we move into the second half of the year. Output growth weakened to a pace indicative of the economy growing at a mere 0.1% quarterly rate, with risks tilted to the downside in the coming months.
"The sluggish output growth reported in July reflected headwinds of deteriorating order books, subdued business confidence and rising costs, all of which were widely linked to the ongoing impact of the policy changes announced in last autumn's Budget and the broader destabilising effect of geopolitical uncertainty.
"Particularly worrying is the sustained impact of the Budget measures on employment. Higher staffing costs have exacerbated firms' existing concerns over payroll numbers in the current environment of weak demand, resulting in another month of sharply reduced headcounts in July."
"The weak growth trajectory and sustained culling of jobs will add to pressure on the Bank of England to cut rates again at its next policy meeting in August. It seems likely that the disappointing growth and labour market trends will increasingly dominate the inflation forecasting narrative, encouraging policymakers to 'look through' the recent rise in price pressures and instead focus on helping to revive growth."
Email this article to a friend
or share it with one of these popular networks:
You are here: news
10 Lower Thames St,
London EC3R 6EN