The UK private sector contracted for a second consecutive month in June, as business activity weakened and firms continued cutting jobs, according to flash survey data released Tuesday.
The S&P Global purchasing managers’ index (PMI) fell to 49.4 in June from 49.7 in May, marking its lowest level in 14 months.
A reading below 50 indicates contraction, while one above that level signals expansion.
The data added to concerns that the UK economy may stagnate in the second quarter of 2026, after posting the fastest growth among Group of Seven economies in the first quarter.
The survey also showed further weakness in the labor market, with S&P Global’s employment sub-index slipping to 46.8 in June from 47.1 in May.
The employment gauge has remained in contraction territory for 21 months, reflecting continued pressure on firms amid weak demand and uncertainty linked to the conflict in the Middle East.
The latest figures come after Prime Minister Keir Starmer resigned on Monday, adding political uncertainty to the weaker economic backdrop.
Input and output costs continued to rise in June, though the pace of price increases eased, according to the survey.
Chris Williamson, chief business economist at S&P Global Market Intelligence, said some war-related price pressures had started to moderate, while subdued growth and labor market conditions suggested demand and wage bargaining power were too weak for inflation to become entrenched.
