- Prior 48.8
- Manufacturing PMI 52.8 vs 52.0 expected
- Prior 52.5
- Composite PMI 52.1 vs 49.7 expected
- Prior 49.3
Key Findings:
- UK private sector business activity returns to growth in July
Comment:
Chris Williamson, Chief Business Economist at S&P Global Market Intelligence:
“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.
“Price pressures cooled thanks to the lower oil prices seen during 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. These higher costs led to a further fall in employment, which has declined continuously since the Autumn 2024 Budget.
“Business optimism about the year ahead improved, reflecting some relief at reduced geopolitical tensions during the survey period and the associated drop in oil prices. But with Middle East worries flaring up again in recent days, a sustained cooling in the price data and upturn in business confidence is by no means assured.”
This article was written by Giuseppe Dellamotta at investinglive.com.