Catenaa, Monday, June 23, 2025- UK private sector expanded more than expected in June after a trade deal with the US brought back business confidence.
S&P Global said on Monday its purchasing managers’ index rose to 50.7 in June, up from 50.3 in May and above analyst expectations, according to provisional estimates published Monday.
The reading is slightly above the 50 threshold, indicating expansion, and marks a recovery to levels last seen in March, just before Donald Trump’s tariff announcements hit confidence and slashed exports to the US.
The report will provide some relief for the Labour government, which is struggling to deliver sustained economic growth against a backdrop of higher taxes, trade wars and now an escalating conflict in the Middle East.
Firms said the UK’s trade deal with the US helped restore client confidence and improve orders, while falling borrowing costs are also helping demand.
However, the survey suggests UK growth remains lackluster. Chris Williamson, chief business economist at S&P Global Market Intelligence, said the PMI results point to growth of just 0.1% in the second quarter.
“Although business conditions have continued to improve since April’s downturn, quelling recession fears, growth of business activity remains disappointingly lacklustre,” said Williamson.
Services activity continued to expand at a modest pace, partly offsetting a sharp contraction in manufacturing.
Companies across the board reported declines in demand for exports amid US tariffs and heightened geopolitical tensions. Employers also shed staff for a ninth consecutive month, resorting to layoffs and hiring freezes to cope with higher cost pressures.
The survey also highlighted some early signs of improving business conditions. Inflationary pressures eased to their lowest level in three months, while new order volumes rose for the first time in six months. The average prices charged by UK firms also rose at the slowest pace since 2021.
