23rd Apr 2025 09:50
(Alliance News) - The UK's service sector declined in April amid "aggressive" continuous job cutting and business optimism at a two-and-a-half-year low, data published by S&P Global showed Wednesday.
The flash UK purchasing managers' composite output index fell to 48.2 points in April from 51.5 in March. Falling below the neutral 50-point mark separating growth from contraction, it indicates a decline in April. It was far below the FXStreet-cited consensus, which had pencilled in a milder slowdown to 50.4 points.
The flash UK services PMI business activity index deteriorated to 48.9 points in April from 52.5 in March. It was an unexpected decline in April, as the FXStreet-cited consensus had anticipated the index to remain above growth territory, at 51.3 points.
The flash UK manufacturing output index fell to 44.0 points in April from 45.3 in March.
The flash UK manufacturing PMI declined to 44.0 points in April from 45.3 in March.
Chris Williamson, chief business economist at S&P Global Market Intelligence said: "Job cutting remains aggressive as business optimism about the year ahead sank to a two-and-a-half-year low, and one of the lowest levels yet recorded by the survey, even surpassing the low seen in the immediate aftermath of the Brexit vote in 2016."
He added that the survey reflected the impact of domestic and foreign headwinds, with the biggest concern being a fall in exports amid weaker global demand and rising global trade worries. Further, staffing costs in the UK increased for employers, which was linked to the rises in national insurance costs and minimum wage.
Williamson said: "The collapse in confidence and drop in output during April raise red flags as to the near-term economic outlook and add pressure on the Bank of England to reduce interest rates again at its May meeting. There will be some uncertainty, however, as to whether the recent upturn in price pressures could become entrenched or whether it merely represents a short-term tax-related spike which should be 'looked through."
The S&P Global flash UK composite PMI is compiled from responses to questionnaires sent to survey panels of around 650 manufacturers and 650 service providers. The responses were collected between April 9 and 22. Final April data will be out on May 1 for manufacturing and on May 6 for services and composite indicators.
By Tom Budszus, Alliance News slot editor
Comments and questions to [email protected]
Copyright 2025 Alliance News Ltd. All Rights Reserved.