UK service sector growth slows in July
By Michele Maatouk
Date: Tuesday 05 Aug 2025
(Sharecast News) - Growth in the UK service sector slowed in July amid a renewed fall in total new work, according to a survey released on Tuesday.
The S&P Global services PMI business activity index fell to 51.8 from 52.8 in June, but remained above the 50.0 mark that separates contraction from expansion.
The survey showed that total new work declined, with the rate of contraction the fastest since November 2022.
It also showed that private sector employment fell again, with the rate of job losses the fastest since February.
Tim Moore, economics director at S&P Global Market Intelligence, said: "Risk aversion and low confidence among clients were the main reasons provided for sluggish sales pipelines, alongside an unfavourable global economic backdrop.
"Hiring trends were especially subdued, with total workforce numbers decreasing to the greatest extent since February. Worries about rising payroll costs were cited as the main factor holding back recruitment.
"Suppliers again sought to pass on rising employment costs, although the latest increase in input prices across the service economy was the slowest since December 2024.
"Despite headwinds from strong cost pressures and lacklustre domestic economic conditions, service providers remain upbeat overall regarding the year ahead business outlook. Optimism improved since June, helped by receding concerns about US tariffs and hopes of a boost to business and consumer spending from interest rate cuts in the second half of 2025."
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