FX.co ★ UK Private Sector Activity Contracts

The S&P Global UK Composite PMI slipped to 49.7 in May 2026 from 52.6 in April, marking the first contraction in private sector activity in more than a year and coming in well below market expectations for an expansion at 51.6. The latest figure was, however, revised up from a preliminary estimate of 48.5.

The downturn was driven by the services economy, where activity fell to 49.3 from 52.7, more than offsetting a slightly faster pace of growth in manufacturing, with the goods-producing sector rising to 53.9 from 53.7. At the aggregate level, new business softened amid client uncertainty and weaker investment sentiment.

A steeper decline in overall activity was averted by a surge in orders for manufacturers, as customers brought forward purchases to pre-empt potential price increases linked to the war in the Middle East. Meanwhile, employment continued to contract, with payroll numbers falling for a 20th consecutive month, as firms cited higher National Insurance contributions as a key factor restraining hiring.