UK private sector activity grows further

The S&P Global UK Composite PMI rose to 50.7 in June 2025 from 50.3 in May, edging slightly above market expectations of 50.5 and marking the second consecutive month of expansion in the UK's private sector, according to a flash estimate.

The modest upturn was largely driven by continued resilience in the services sector, which recorded a reading of 51.3 compared to 50.9 in the previous month, reflecting sustained growth in consumer-facing industries and professional services. This strength more than offset a further decline in manufacturing activity, although the pace of contraction in the manufacturing sector eased slightly, with its PMI rising to 47.7 from 46.4 in May.

At the aggregate level, new business increased for the first time since November 2024, albeit only marginally. The improvement was underpinned by a recovery in domestic demand, as both business-to-business spending and household consumption showed tentative signs of strengthening.

However, the picture was less positive for external demand, with export orders continuing to decline. Survey respondents attributed the drop to growing uncertainty surrounding potential tariffs from the United States, which weighed on international sales and highlighted ongoing vulnerabilities in UK trade prospects.

Despite the mixed sectoral performance, the data suggests a fragile but positive turning point for the UK economy, as businesses begin to regain confidence in the face of easing inflationary pressures and cautious optimism around domestic policy stability.