UK private sector returns to growth in July

24th Jul 2026 10:23

(Sharecast News) - The UK's private sector returned to growth in July, helped along by the World Cup and the heatwave, according to a survey released on Friday.

The flash S&P Global UK PMI composite output index rose to a three-month high of 52.1 from 49.3 in June, coming above expectations for a reading of 49.8. A reading above 50.0 signals expansion, while a reading below indicates contraction.

Meanwhile, the flash services PMI business activity index printed at 51.8 in July, up from 48.8 a month earlier and also marking a three-month high.

The manufacturing PMI ticked up to 52.8 this month from 52.5 in June.

Chris Williamson, chief business economist at S&P Global Market Intelligence, said: "UK businesses reported stronger activity in July, pointing to a faster pace of economic growth at the start of the third quarter.

"Hospitality companies saw demand boosted by good weather, the FIFA World Cup and more domestic holidays, as high costs and uncertainty continued to deter some foreign travel. However, overall services growth remained lacklustre amid cost-of-living pressures. Unusually for recent years, manufacturing is now growing faster than services, buoyed by rising exports. One caveat is that manufacturers and their customers continued to build precautionary stocks, widely linked to supply chain disruption caused by the war in the Middle East, meaning part of the recent factory upturn could prove short-lived."

Williamson noted that price pressures cooled thanks to the lower oil prices seen in the first half of the month, which could strengthen speculation that the Bank of England will hold off raising interest rates.

"However, inflationary pressures clearly remain elevated, as the ongoing energy shock and supply squeeze from the war in the Middle East continues to add to existing business cost pressures from earlier government policies," he said.