FX.co ★ UK Private Sector Activity Drops for 2nd Month

The S&P Global UK Composite PMI increased to 49.4 in May 2025, up from 48.5 in April, matching market forecasts of 49.3. This reflects the second straight month of contraction in private-sector activity, as indicated by a preliminary estimate. The manufacturing sector saw a decline, with its index falling to 45.1 from 45.4 in April, marking the steepest reduction in 19 months. This decline overshadowed a slight recovery in the service sector, which rose to 50.2 from 49. New orders experienced the largest drop in two and a half years, as clients curtailed non-essential spending amid heightened global economic uncertainty, fueled by the looming threat of aggressive US tariffs. Meanwhile, companies reported significant cost pressures due to rising labor costs, utility expenses, shipping charges, and technology services, though the weaker dollar mitigated some of these increases. The convergence of elevated labor costs and dwindling consumer demand prompted firms to continue reducing employment, with manufacturing plants experiencing the fastest job cuts in five years.