UK Services PMI Returns to Growth at 52.1 as Job Losses Match a Record Run
The United Kingdom’s services sector returned to growth in July, but employers cut staff for a twenty-second consecutive month, matching the longest run of job losses in the survey’s thirty-year history. The final S&P Global UK PMI data, published on 5 August 2026, put the services business activity index at 52.1, up from 48.8 in June.
| S&P Global UK PMI | July 2026 | June 2026 |
|---|---|---|
| Services Business Activity | 52.1 | 48.8 |
| Composite Output | 52.2 | 49.3 |
Both final readings were revised up from the flash estimates published on 24 July, which had shown services at 51.8 and the composite at 52.1. The survey was collected between 9 and 29 July.
New business rose marginally, ending a four-month decline and marking the first increase in five months. Business expectations improved for a second month running to their highest since February, with around 45 percent of the panel predicting an upturn in activity over the coming year against roughly 15 percent anticipating a reduction.
The labour market is the exception to the improvement. July was the twenty-second consecutive month in which services employment fell, a joint record in three decades of data, equalling the runs recorded during the global financial crisis and after the dotcom downturn. On our reading, this is the clearest sign that the pickup in output is being delivered by existing staff rather than by new hiring, and it is consistent with the pattern visible in the United States services survey for the same month.
Price pressures continued to cool. Input price inflation was the slowest for five months and the weakest since February, while prices charged rose at a five-month low. Tim Moore, Economics Director at S&P Global Market Intelligence, observed that “UK service providers moved back into growth mode during July.”
The survey lands against a policy backdrop that has already turned cautious. The Monetary Policy Committee, at a meeting that ended on 29 July with the decision published on 30 July, held Bank Rate at 3.75 percent by six votes to three, with Megan Greene, Catherine Mann and Huw Pill preferring a rise to 4.00 percent.
Separately, the Bank of England’s quarterly report on the Asset Purchase Facility, published on 4 August, showed the gilt portfolio at 521.8 billion pounds at the end of June against 527.9 billion pounds at the end of March. Five sale operations over the quarter accounted for a reduction of 6.1 billion pounds. The current programme, a 70 billion pound reduction covering October 2025 to September 2026, was agreed at the September 2025 MPC meeting. Net flows from the facility to HM Treasury peaked at 123.9 billion pounds at the end of September 2022; by the end of the second quarter of 2026 the cumulative net position over the life of the facility stood at 16.2 billion pounds.
Why it matters: The composition of the July survey pulls in two directions for policy. Output and new orders have turned up while both input costs and charges are rising at their slowest rates in months, which argues for patience on rates. Against that, a twenty-two month run of job losses is not the profile of an economy comfortably absorbing a 3.75 percent policy rate. On our reading the July data strengthen the case of the majority that held in July rather than the minority that wanted a rise, because the disinflation is now visible in the charges firms actually levy rather than only in input costs.
Looking ahead: The remaining MPC dates for 2026 are 17 September, 5 November and 17 December. The August PMI releases will show whether the improvement in new orders is sustained and whether the employment series finally breaks its record run.
Sources: S&P Global, UK service sector returns to growth in July, S&P Global UK Services PMI, 5 August 2026; Bank of England, Monetary Policy Summary and minutes, 30 July 2026; Bank of England, Asset Purchase Facility Quarterly Report, 4 August 2026.
