FX.co ★ UK Economic Activity Contracts for 1st Time in 1-1/2-Year

In April 2025, the S&P Global UK Composite PMI slipped to 48.2, a decrease from March's 51.5, defying market forecasts which anticipated a figure of 50.4. This signals the first downturn in UK economic activity since October 2023, according to preliminary data. Both the manufacturing and services sectors experienced declines, with manufacturing dropping to 44 from 44.9 in March, and services decreasing to 48.9 from 52.5, marking the first contraction in the service industry in 17 months. The contraction in new work orders was recorded for the fifth consecutive month, with businesses attributing the dip to uncertainties surrounding US tariff policies, particularly affecting export orders from factories. Additionally, decreased workloads, coupled with increased payroll costs due to new minimum wage laws and National Insurance hikes, resulted in a reduction of staffing levels for the seventh consecutive month. This also contributed to the continued rise in input costs. Consequently, both manufacturers and service providers have reported a significant drop in business activity expectations, with the confidence index plunging to its lowest point in over two years.