Growth slows across UK private sector as job cuts accelerate
The flash figures are based on preliminary data. Any score above 50.0 indicates that activity is growing while any score below means it is contracting.
The figures therefore pointed towards continued growth but at a slower rate.
Firms linked job cuts to higher labour costs in last autumn's budget from Chancellor Rachel Reeves (Anthony Devlin/PA)
It was also weaker than expected by economists, who had predicted a reading of 51.8 for the month.
Chris Williamson, chief business economist at S&P Global Market Intelligence, said: The flash UK PMI survey for July shows the economy struggling to expand as we move into the second half of the year.
'The sluggish output growth reported in July reflected headwinds of deteriorating order books, subdued business confidence and rising costs, all of which were widely linked to the ongoing impact of the policy changes announced in last autumn's budget and the broader destabilising effect of geopolitical uncertainty.'
The data showed that growth was driven by the service sector in July, with firms highlighting an 'uptick' in consumer spending.
Nevertheless, service businesses said they still faced headwinds linked to 'fragile domestic economic conditions' and wider uncertainty.
Meanwhile, manufacturing production stabilised during the month after eight consecutive months of decline.
Goods producers however said they were impacted by 'challenging business conditions', particularly in major export markets due to the continued fallout of the US tariff changes.
Surveyed firms reported a drop in overall new work from the private sector, slipping to its weakest level for three months.
Lower levels of new work contributed to another drop in employment, with the survey showing the fastest rate of 'job shedding' since February, with job cuts across the manufacturing and service sectors.
Companies cited that higher labour costs, following rises in national insurance contributions and the minimum wage, led to a number of workforce restructurings.
Mr Williamson said: 'Particularly worrying is the sustained impact of the budget measures on employment.
'Higher staffing costs have exacerbated firms' existing concerns over payroll numbers in the current environment of weak demand, resulting in another month of sharply reduced headcounts in July.'
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Reuters
a minute ago
- Reuters
Crypto exchange Bullish's shares set to open over 75% above IPO price in debut
Aug 13 (Reuters) - Bullish's (BLSH.N), opens new tab shares were indicated to open more than 75% above their initial public offering price on Wednesday, signaling growing investor confidence in the sector and boosting prospects for future U.S. listings by other digital asset firms. If the billionaire venture capitalist Peter Thiel-backed crypto exchange starts to trade at the last indicated range of $60 to $65 on the NYSE, it could potentially value the company at more than $9.5 billion. Bullish raised $1.11 billion in an IPO priced at $37 apiece, valuing it at $5.4 billion and marking another sign of mainstream adoption in a sector that recently topped $4 trillion. "Bullish came out with an attractive initial valuation, and investors responded by aggressively bidding it up during the pre-IPO process," said Jeff Zell, senior research analyst at IPO Boutique. A string of regulatory wins under a pro-crypto White House, corporate treasury adoption, and ETF inflows have prompted investors to embrace the once-scorned digital asset class, driving bellwether bitcoin to record highs. Several crypto firms, including exchange Gemini and asset manager Grayscale, have also confidentially filed to go public. "Crypto is becoming one of the big pillars of the IPO market, with more deals expected not only via IPO but also through de-SPAC transactions," IPOX CEO Josef Schuster said, referring to take-public blank-check mergers that are frequently used by crypto firms. Bullish, which acquired cryptocurrency website CoinDesk in 2023, plans to convert a significant portion of the IPO proceeds to stablecoins — a slice of the crypto space that has boomed since U.S. President Donald Trump signed the Genius Act, creating a regulatory regime for the dollar-pegged cryptocurrencies. Bullish's debut marks a rare U.S. listing by a crypto exchange, joining larger retail-focused rival Coinbase (COIN.O), opens new tab, which became the first crypto player to be included in the benchmark S&P 500 (.SPX), opens new tab index in May. Founded in 2020, Bullish targets institutional clients whose crypto holdings are expected to rise as a new White House order aims to allow alternative investments like crypto in 401(k) retirement plans. "A pure institutional strategy positions Bullish for more stable, recurring revenue than exchanges reliant on retail volumes, which tend to be cyclical and sentiment-driven," said Michael Hall, co-chief investment officer and founding partner at Nickel Digital Asset Management. Bullish CEO Tom Farley had previously worked as the president of NYSE. "For a sector still overcoming reputational headwinds, that kind of leadership experience can be a differentiator in securing institutional mandates," Hall said.
Reuters
an hour ago
- Reuters
S&P 500, Nasdaq rise to record highs on September rate cut hopes
Aug 13 (Reuters) - The benchmark S&P 500 and the Nasdaq hit record highs on Wednesday, underpinned by gains in megacap companies as investors were increasingly confident that the Federal Reserve could restart its monetary policy easing cycle next month. Signs that U.S. tariffs on imports have not fully filtered into headline consumer prices came as a relief for investors this week as they scour for insights on the impact trade uncertainty has had on the economy. Despite data showing underlying price pressures were on the rise, markets also factored in recent weakness in the job market and a shake-up at the Federal Reserve as they leaned in favor of a potential dovish move by the central bank in September. Traders are now fully pricing in a 25 basis points interest rate cut, according to the CME's FedWatch Tool, up from 89.2% last week. The central bank last lowered borrowing costs in December. "We're pretty much certain that we'll have at least 25 basis points of rate cuts in the month of September," said Thomas Hayes, chairman at Great Hill Capital LLC in NY, and noted that the Fed would have to respond to labor market weakness. At 09:59 a.m. ET, the Dow Jones Industrial Average (.DJI), opens new tab rose 379.32 points, or 0.86%, to 44,839.44, the S&P 500 (.SPX), opens new tab gained 28.17 points, or 0.44%, to 6,474.20 and the Nasdaq Composite (.IXIC), opens new tab gained 84.32 points, or 0.39%, to 21,766.23. Ten of the 11 S&P 500 sectors were higher, led by consumer discretionary (.SPLRCD), opens new tab that gained 1.1%, with (AMZN.O), opens new tab and Tesla (TSLA.O), opens new tab up over 1.5% each. The blue-chip Dow (.DJI), opens new tab was less than 1% away from an all-time high and the Russell 2000 index (.RUT), opens new tab, which tracks rate-sensitive small-cap companies, added 0.8% to hit a six-month high. "Rates coming down will also help (small-cap companies) refinance their debt loads, which is very positive for a lot of the laggard stocks that haven't moved as much in this big move off the April lows," Hayes said. The CBOE volatility index (.VIX), opens new tab, popularly referred to as Wall Street's fear gauge, dropped to 14.46 - its lowest since January. Later in the day, investors will scrutinize remarks of a number of policymakers, especially Chicago Fed President Austan Goolsbee - a Federal Open Market Committee voting member this year. Earnings are also in focus. CoreWeave (CRWV.O), opens new tab, which is backed by Nvidia (NVDA.O), opens new tab, slumped 12% after the AI data center operator reported a bigger-than-expected quarterly net loss. Eyes are also on developments surrounding the China revenue-sharing deal the U.S. government signed with chipmakers like Nvidia and Advanced Micro Devices (AMD.O), opens new tab, which the White House said could be expanded to others in the sector. Nvidia was flat, while Advanced Micro Devices rose 5.8%. Paramount Skydance (PSKY.O), opens new tab jumped 19% and is up over 24% this week. The company won exclusive broadcasting rights to the Ultimate Fighting Championship for seven years earlier this week. In geopolitics, Donald Trump and European leaders are expected to hold a virtual meeting on the Russo-Ukraine conflict, two days before the U.S. president meets Russian President Vladimir Putin. Advancing issues outnumbered decliners by a 3.82-to-1 ratio on the NYSE and by a 2.45-to-1 ratio on the Nasdaq. The S&P 500 posted 32 new 52-week highs and two new lows, while the Nasdaq Composite recorded 110 new highs and 36 new lows.
The Independent
2 hours ago
- The Independent
Labour can't hit ‘working people', so now they're after people who used to work
Labour has got itself into a cleft stick. Having come to power on a pledge of not raising taxes on 'working people,' in response to the opposition charge that it cares more about those who don't work, that raising money from the employed goes to help those who choose to be unemployed, Sir Keir Starmer and Rachel Reeves are stuck. They are faced with a deficit of £50bn, give or take, for which they can no longer blame the Tories – that legacy was half. It's down to their failure to drive the economy, to achieve as they insist, 'faster and further' growth. It's just not happening, and, meanwhile, they have that hole to fill. They can't borrow extra because another reason that the chasm is so large is due to higher-than-expected borrowing costs. They dare not cut services because that would alienate their bedrock, and 'austerity' is what Tories do, not them. So, they cast around for tax targets. However, they can't alight on those who are putting in the hours and earning by aiming for income tax, employee national insurance, or VAT, because that would betray the election promise. So, they pick those who once worked. Inheritance tax, or IHT, or as it's popularly known, 'death duty,' is in their crosshairs. At present, inheritance tax is 40 per cent on estates above £325,000. But there is no limit on how much can be gifted to relatives tax-free if the giving is made seven years before someone dies. If it's within seven years, then a sliding scale or 'taper relief' applies. The rate drops each year, from 32 per cent to 8 per cent. Those who think they, or rather their inheritors, may be clobbered duly give it away in good time. The result is that inheritance tax is paid by only around four per cent of estates. In the eyes of Reeves and her advisors, that is too little. They know that people are sitting in homes that have soared in value and possess gold-plated pension pots, and they want some of it. They are looking at imposing a lifetime cap on how much can be gifted and/or changing the rules on taper relief. To ensure, in other words, that IHT is not so easily avoided and that the four per cent figure increases enormously. What's not to like? Politically, those affected are the better off, who are not natural Labour voters. It is not earned money, in the sense that property prices and pensions have risen since they ceased to work. It's fair game to grab it. Indeed, that is precisely what a source with knowledge of the work told the Guardian: 'It's hard to make sure these taxes don't end up with loopholes that undermine their purpose. But we are trying to work out what revenue might be raised and how to ensure it's a fair approach.' Labour has form for this. It's exactly what this government did to the farmers, except there it was farmers with land worth more than £3m. Reeves said this week she believed they 'should make a contribution.' These are weasel words. Reeves is ignoring the fact that they have already contributed, as presumably, she and her colleagues are doing so again, by claiming they are looking to be 'fair'. Apparently, one of the motivators is that they are not keen on a wealth tax as many of their supporters would like because that will serve to encourage the wealthy who can do so to leave the country, and there is evidence to suggest that is already happening, and would damage attempts to encourage greater investment to galvanise the economy. But how is this any different? It still sends the same signal that Labour sees the rich and not even that rich, as ripe for plundering. However it is dressed up and spun, the message is clear: you don't want to work and make some money under Labour, because they will get you. Ignoring the working and selecting those who worked may cleverly satisfy their political and fiscal ambitions, but it fools no one. Under Labour, it really does pay not to work.
